Surge in Insurance Disputes Exposes Mis-Selling, Transparency Gaps
India’s insurance sector is witnessing a worrying rise in consumer grievances, highlighting persistent issues of mis-selling and poor transparency. According to the latest Q2 2025 Trends Report by Insurance Samadhan, one of the country’s largest private grievance redressal platforms, complaints surged by 45% between April and June this year.
The report analysed over 4,000 disputes worth ₹75.4 crore, revealing a sharp increase from the previous quarter when 684 complaints were filed. In Q2, the number spiked to 974, while the value of contested claims rose 43.1% to ₹119.5 crore, reflecting growing dissatisfaction among policyholders.
Health Insurance Tops the Grievance List
Health insurance policies were at the heart of the storm, accounting for 67.5% of all complaints, followed by life insurance at 25.5% and general insurance at 6.9%. Endowment policies were identified as the most mis-sold products, often exposing customers to hidden penalties, low returns, and even capital losses.
The data also pointed to a year-on-year rise of 11.2% in mis-selling-related grievances compared to Q2 2024, with disputed claim values climbing nearly 10%.
Young Policyholders Leading the Pushback
Interestingly, the 31–40 age group emerged as the most vocal in challenging insurers, reflecting how younger, tech-savvy customers are increasingly unwilling to tolerate unfair practices. Geographically, Uttar Pradesh recorded the highest share of complaints at 16%, suggesting that awareness is spreading beyond metros and into smaller towns.
“It shows that policyholders, especially younger generations, are willing to stand up for their rights, knowing there are platforms like Polifyx to rely on. This motivates us to work harder to protect consumer interest and restore faith in the USD 145.8 billion insurance industry,” said Shilpa Arora, Co-founder and COO of Insurance Samadhan.
Technology Driving Redressal
Digital tools are also making it easier for customers to fight back. Insurance Samadhan’s Polifyx app allows users to check their policy details through a ‘Know Your Policy’ feature and file grievances seamlessly. The growing confidence in such platforms, the company said, has been a key driver of the surge in complaints.
A Systemic Problem
The trend mirrors findings from the Insurance Regulatory and Development Authority of India (IRDAI), which reported that 20% of all life insurance complaints in 2022–23 were linked to mis-selling. Half of those cases involved private insurers accused of deceptive sales pitches and target-driven tactics.
Since its inception in 2019, Insurance Samadhan has resolved more than 20,000 grievances and helped recover claims worth over ₹220 crore. Its Q2 report underscores both the vulnerabilities of Indian policyholders and the vital role of independent grievance platforms in bridging the trust gap.
As India’s insurance market grows rapidly, the rise in disputes serves as a reminder that structural reforms in sales practices and transparency are long overdue. Without them, the burden of safeguarding consumer rights will increasingly fall on external redressal mechanisms rather than the insurers themselves.
