Claim Approved but Payment Delayed: Demand the Money with Interest

Reviewed on: 2026-06-12.

Rohan, an engineer in Pune, had his health reimbursement claim of Rs 1,86,400 approved on 3 March. The settlement letter promised NEFT within seven working days. Fifty six days later, nothing had reached his account. Under the IRDAI policyholder protection framework of 2024, his insurer now owes him the claim amount plus interest at 2 percent above the RBI bank rate for the period of delay. He does not have to request this interest as a favour. He has to demand it by name.

Here is what that demand is worth. Assume the bank rate at the start of the financial year was 5.75 percent. Add 2 percent and the insurer owes interest at 7.75 percent a year. On Rs 1,86,400 that works out to about Rs 39.60 a day. For 56 days of delay, Rohan can ask for roughly Rs 2,200 over and above his claim. The amount is small. The effect is not. A demand that quotes the interest rule tells the insurer you know the cost of every further day of silence.

The IRDAI (Protection of Policyholders' Interests, Operations and Allied Matters of Insurers) Regulations, 2024, read with the 2024 master circulars, set claim timelines and attach a price to delay. Health reimbursement claims are expected to be settled within 15 days of receiving the claim. Once a claim is approved, payment should follow at once. Where payment is delayed beyond the permitted timeline, the insurer is required to pay interest at 2 percent above the bank rate, counted from the date the payment fell due.

Two points matter in practice.

• The duty to pay interest sits on the insurer. The rule does not say “if the policyholder asks”. In real life, insurers rarely add it on their own, so put it in writing.
• Interest runs on the approved amount for the full period of delay. Keep the approval letter and your bank statement; together they prove the start and the gap.

Before you write a strong letter, spend ten minutes checking that the money did not bounce. A surprising share of “delayed” payments are NEFT returns caused by a wrong account number, a changed IFSC after a bank merger, or a dormant account. Check your bank statement for a credit and reversal on the same day. Compare the account number printed in the settlement letter against your passbook, digit by digit. If the details are wrong, send a cancelled cheque and ask for reprocessing with interest for the insurer's data entry error. If the details are right, the delay is squarely the insurer's problem.

Email this to the insurer's Grievance Redressal Officer (the GRO email ID is on the policy document and the insurer's website). Mark a copy to the claims team that issued the approval.

Subject: Claim [number] approved on [date], payment not received.
Demand for payment with interest under IRDAI norms.

Dear Grievance Redressal Officer,

1. My claim [number] under policy [number] was approved for
   Rs [amount] on [date]. The settlement advice promised credit
   within [x] working days.
2. As on [today's date], no amount has been credited to my
   account [last 4 digits], [bank name]. My bank statement for
   the period is attached. The account details in your
   settlement advice are correct.
3. The payment is delayed by [n] days. Under the IRDAI
   (Protection of Policyholders' Interests, Operations and
   Allied Matters of Insurers) Regulations, 2024, interest at
   2 percent above the bank rate is payable on delayed claim
   payments.
4. Please credit Rs [amount] together with interest for the
   full period of delay within 7 days, and confirm the UTR
   number in writing.

If this is not resolved, I will escalate to Bima Bharosa and
the Insurance Ombudsman.

[Name, policy number, mobile, date]

The ombudsman route is free, needs no lawyer, and covers exactly this situation: an admitted claim not paid. Carry the approval letter, your bank statement and the GRO correspondence.

If your insurer is LIC, New India Assurance, National Insurance, Oriental Insurance or United India Insurance, it is a public authority under the RTI Act. You can ask the CPIO for the date payment was processed, the UTR number, the reason recorded for the delay, and the file noting on your claim. See how to file RTI online and what to do if the reply does not come.

Private insurers are not public authorities, so an RTI to them will fail. You can still file RTI with IRDAI for records of how your Bima Bharosa complaint was handled.

From the date the payment fell due under the applicable timeline, not from the date you complained. Keep the approval or settlement letter; it fixes the starting point.

The RBI bank rate, published on rbi.org.in. The interest payable is 2 percent above it. Use the rate prevailing at the start of the financial year as your working figure and let the insurer compute the exact paisa.

Send a cancelled cheque or a bank-attested account confirmation and ask for reprocessing in writing. If the wrong details came from the insurer's own records, say so and keep your interest demand alive for the whole period.

Yes. Interest applies to whatever portion of the approved amount remains unpaid beyond the timeline. Quote the approval figure, the amount received and the date of part payment.

Rarely. The regulation places the duty on the insurer, but in practice payment teams process the principal and stop. A written demand naming the rule is usually what unlocks it.

The insurer is expected to resolve a registered complaint within 14 days. If the reply is unsatisfactory or does not come, move to the ombudsman without waiting further. Watch the one-year limitation.

This guide is part of a four-part claims series.

• Claim closed without any communication
• Claim document uploaded but shown missing
• CGHS or ECHS claim returned for deficiency
• Life insurance maturity payment delayed
• Cashless claim denied because the hospital was blacklisted
• All practical guides

Download the approved-claim interest demand checklist (PDF).