Health insurers are witnessing a notable rise in fraudulent claims, particularly in the small claims segment around Rs 50,000. This trend is most evident in claims related to digestive ailments, where oversight is less stringent. Claims between Rs 50,000 and Rs 2.5 lakh are particularly vulnerable to manipulation, as they offer a financial incentive without rigorous scrutiny. Industry reports indicate that 8–10% of total claim payouts are lost annually to fraud, amounting to Rs 8,000–10,000 crore. The ease of processing small claims, combined with the normalization of minor fraud, has weakened trust in the system. Claims linked to infectious diseases also show high misuse due to vague symptoms and extensive testing. In contrast, surgical claims are less prone to fraud due to their complexity and required documentation. This situation poses challenges for insurers and ultimately affects customer premiums.