16 Lakh Death Claims in One Year: How COVID Changed Life Insurance in India

Between April 2021 and March 2022, India’s life insurance companies received 16,05,869 death claims. That’s 7,31,037 more families filing claims than just two years earlier. In a normal year, the industry processed around 8.7 lakh claims. In the COVID peak year, it processed nearly double that.

The financial impact was even steeper. Total claim amounts jumped from ₹19,228 crore in FY 2019-20 to ₹47,457 crore in FY 2021-22. That’s not just more claims; the claims were bigger. Per-claim amounts rose 34%, from ₹2.20 lakh to ₹2.96 lakh. COVID disproportionately affected working-age adults who held term insurance policies with higher sums assured than the industry average.

Three years past the peak, the numbers tell a more complicated story than “things are back to normal.” Claims haven’t returned to pre-pandemic levels. Rejection rates have crept up. And the amount of money flowing through the claims system has permanently shifted upward. We went through twelve years of IRDAI data to track what happened, how insurers responded, and what the post-COVID baseline looks like for anyone who holds a life insurance policy today.

The spike in numbers

For six consecutive years before the pandemic, death claims filed in India barely moved. The count stayed in a narrow band between 8.4 lakh and 8.7 lakh claims per year, from FY 2013-14 through FY 2019-20. Then everything changed.

FY 2020-21 (the first COVID year) saw a 25% jump, from 8.7 lakh to nearly 11 lakh claims. That was the first wave, concentrated in the last quarter of the financial year. The real blow landed in FY 2021-22, when the second wave pushed claims to 16.06 lakh. India’s official COVID death toll crossed 5 lakh during that fiscal year, though excess mortality estimates ran significantly higher.

After the peak, claims dropped sharply to 10.75 lakh in FY 2022-23 and further to 9.99 lakh in FY 2023-24. But they ticked back up to 10.34 lakh in FY 2024-25. The pre-COVID average of 8.6 lakh claims per year now looks like a number the industry may never return to.

The money tells a different story

The claim count jumped 84% from FY 2019-20 to FY 2021-22. The claim amount jumped 147%. That gap is significant, and it points to a specific pattern in who died.

The per-claim average rose from ₹2.20 lakh in FY 2019-20 to ₹2.96 lakh in FY 2021-22 and has kept climbing since, reaching ₹3.34 lakh in FY 2024-25. Two things are happening here. First, COVID deaths were concentrated among 30-to-60-year-olds who held higher-value policies, particularly term insurance. Second, the underlying shift toward term insurance (with sums assured of ₹50 lakh or ₹1 crore) has continued to push up average claim sizes even after the pandemic receded.

The payout numbers make this clearer. Insurers paid ₹18,042 crore in FY 2019-20. In FY 2021-22, they paid ₹45,818 crore. That’s ₹27,776 crore in additional death benefit payouts in a single year. Even in FY 2024-25, total payouts stand at ₹33,697 crore, which is 87% higher than the pre-COVID level.

Did insurers reject more claims during COVID?

This is the question most policyholders worry about. When claims surge, do insurers get stricter? The data says the opposite happened.

During the peak COVID year (FY 2021-22), the rejection rate dropped to 1.03% by count, the lowest in the twelve-year dataset. In raw numbers, repudiations rose from 11,189 to 16,509. But paid claims rose far faster, from 8,46,476 to 15,87,110. The denominator grew so much that the rejection rate fell even as absolute rejections increased.

There are a few reasons for this. IRDAI issued specific guidelines during the pandemic asking insurers to expedite claims and avoid unnecessary delays. Many COVID death claims were straightforward: the cause of death was documented by hospitals and COVID testing, leaving less room for dispute. And the political and reputational pressure on insurers during a national health crisis was enormous.

The years since tell a different story. Rejection rates have climbed steadily from 1.03% to 1.68% in FY 2024-25. That 1.68% is the highest rejection rate in the entire twelve-year dataset. The absolute count of repudiated claims (17,333 in FY 2024-25) is also the highest on record, even though total claims have fallen from the COVID peak.

By amount, the pattern is less clean. The rejection rate by amount was 3.28% in FY 2020-21, dropped to 2.69% in FY 2021-22, spiked to 3.47% in FY 2022-23, and settled to 2.79% in FY 2024-25. The year-to-year swings in amount-based rejection rates are driven by a small number of high-value claim denials, which makes the metric noisier.

How individual insurers handled the surge

The industry-level data hides wide variation between insurers. Some saw their claims double or triple. Others absorbed the spike more evenly. Here’s how the major private insurers performed.

HDFC Life’s claims went from 16,941 to 26,944 between FY 2020-21 and FY 2021-22 (a 59% increase). Repudiations rose from 84 to 136 in absolute terms, but the rejection rate barely moved (0.50% to 0.51%) because paid claims grew just as fast. By FY 2024-25, HDFC Life’s repudiated claims had dropped to just 58 with a rejection rate of 0.29%, the lowest of any major private insurer.

ICICI Prudential tells a different story. Claims peaked at 22,265 in FY 2021-22 with 398 repudiations. But the following year, after COVID claims had mostly been processed, repudiations jumped to 638 even as claims fell to 14,253. That post-COVID spike suggests ICICI Prudential caught non-disclosure or policy irregularities during retrospective review that it hadn’t flagged during the acute crisis. By FY 2024-25, repudiations had fallen sharply to 82.

SBI Life’s trajectory shows the financial weight of COVID on a large insurer. Claims filed jumped from ₹1,615 crore to ₹2,809 crore in the peak year (a 74% increase). Even in FY 2024-25, claims filed stand at ₹2,599 crore (up 61% from FY 2020-21), reflecting both portfolio growth and the permanent upward shift in per-claim amounts.

Bajaj Allianz and Aditya Birla Sun Life both show the expected pattern: claims surging during COVID, repudiations rising in absolute terms but not proportionally, and a gradual return to pre-pandemic claim volumes with lower repudiation counts.

The unclaimed claims problem that fixed itself

Buried in the claims data is a category that rarely gets attention: unclaimed amounts. These are claims where the insurer has approved the payout, but the nominee hasn’t collected the money. Before COVID, this was a sizable problem.

In FY 2019-20, 10,990 claims worth ₹347 crore went uncollected. By FY 2024-25, that number had fallen to 243 claims worth ₹39 crore. The count dropped 98% and the amount dropped 89%.

The COVID crisis likely accelerated this improvement. The massive increase in death claims meant more families interacted with the insurance claims process than ever before. IRDAI’s push for faster processing, combined with digital claims filing that many insurers adopted during lockdowns, made it harder for approved payouts to slip through the cracks. Nominees became more aware of their entitlements, and insurers became more proactive about reaching beneficiaries.

The post-COVID new normal

If you expected claims to snap back to the pre-COVID baseline of 8.7 lakh claims and ₹19,000 crore in payouts, that hasn’t happened. FY 2024-25 shows 10,33,997 claims and ₹34,580 crore in payouts. Both metrics are permanently higher.

The 18% increase in claim count reflects two factors working simultaneously. India’s insured population has grown, with more policies in force in FY 2024-25 than five years earlier. And term insurance penetration has increased, partly driven by COVID-era awareness. More people bought life insurance during and after the pandemic, and more of those policies are pure protection plans with higher sums assured.

The 80% increase in claim amounts is even more telling. Per-claim averages have risen from ₹2.20 lakh to ₹3.34 lakh (a 52% increase), which reflects the shift toward higher-value term policies in the industry mix. When your policyholders hold ₹50 lakh and ₹1 crore term plans instead of ₹5 lakh endowment policies, each death claim carries a much larger financial obligation.

The rejection rate trend is the one metric that should concern policyholders. At 1.68% in FY 2024-25, it’s the highest in twelve years. The absolute count of 17,333 repudiated claims is also a record. Some of this is likely a return to pre-pandemic underwriting standards after the relaxed approach during COVID. Some may reflect increased scrutiny of policies sold during the pandemic years, when many insurers loosened medical examination requirements to maintain sales.

What this means for your policy

If you bought a life insurance policy between March 2020 and December 2021, pay extra attention. Many policies sold during that window had simplified underwriting: tele-medical exams instead of full physicals, self-declared health questionnaires, and relaxed age limits for non-medical policies. If you didn’t disclose a pre-existing condition during that process, your claim is at higher risk of rejection now that insurers have returned to standard scrutiny.

If you’re buying a policy today, the rising rejection rate matters for how you evaluate insurers. A 1.68% industry rejection rate means roughly 1 in 60 claims gets denied. The reasons for denial haven’t changed: non-disclosure of medical history, policy lapsed at time of death, or death within the contestability period from an undisclosed cause. But the rate at which these denials happen has been climbing for three consecutive years.

Three practical steps based on what the data shows:

1. Disclose everything on your proposal form. The most common ground for claim rejection is non-disclosure of pre-existing conditions. A rejected claim of ₹50 lakh or ₹1 crore devastates a family far more than a slightly higher premium from honest disclosure. For more on how claims get processed and what triggers rejections, read our claims filing guide.
2. Check your insurer’s rejection trend, not just the current year. An insurer with a rising rejection rate over three to four years is a different proposition from one with a stable or declining rate. Our CSR ranking tracks both count-based and amount-based settlement ratios for every insurer.
3. Make sure your nominee knows the policy exists. Unclaimed amounts have fallen dramatically, but ₹39 crore still went uncollected in FY 2024-25. Keep your policy documents accessible, inform your nominee about the policy, and register the nomination with the insurer. If you’re unsure how much cover your family needs, our coverage calculator works backward from your actual expenses and debts.

Frequently asked questions

Methodology

Data source: IRDAI Handbook on Indian Insurance Statistics, editions covering FY 2013-14 through FY 2024-25. All figures are for individual death claims reported by life insurers operating in India.

Calculations: Rejection rate = Claims Repudiated / (Claims Paid + Claims Repudiated), by count. Per-claim average = Total Amount Intimated / Total Claims Intimated. Percentage changes are calculated against FY 2019-20 as the pre-COVID baseline (the last full financial year before the pandemic affected claims). All amounts are in Indian Rupees, using crore (₹1 crore = ₹1,00,00,000) and lakh (₹1 lakh = ₹1,00,000) as standard units.

Insurer-level data: Individual insurer figures cover FY 2020-21 to FY 2024-25. Where specific metrics are not available for an insurer in a given year, the cell is marked with a dash. “Repudiated” and “Rejected” are separate IRDAI categories; our insurer table uses the “Repudiated” column unless otherwise noted. HDFC Life’s FY 2021-22 data shows 136 repudiated claims and 188 rejected claims (₹171.83 crore); these are separate IRDAI categories. “Claims Filed” in the insurer table uses the IRDAI “claims intimated” field.