Private medical insurance (PMI) complaints to the Financial Ombudsman Service (FOS) increased by 27% last year.
However complaints about income protection (IP) and critical illness (CI) in the 12 months to the end of March remained steady.
Although new PMI cases totaled 652, up from 514 in 2009, this was still less than 1% of all new cases received by the FOS, while IP and CI combined accounted for only 1%.
IP new cases grew by just 2 to 776 for the year, with CI seeing an additional 8, taking that annual total to 598.
A third (35%) of health insurance complaints (which includes PMI, IP and CI) were upheld, an increase of 4% on last year.
The ombudsman praised the protection industry as a whole for its approach to tackling claims, saying: "This trend reflects the continuing improvement we have seen in the quality of claims handling in the "protection" sector.
"We have referred in previous annual reviews to our initiative with this sector, to help ensure that reasonable standards are applied to the handling of claims (and complaints) involving alleged "non disclosure" of medical information by consumers.
"As a result of this initiative, insurers are now reporting a significant increase in the proportion of claims they are paying in relation to critical illness policies. The initiative has also had the effect of reducing the number of disputes referred to the ombudsman service about critical illness policies."
It also explained that the disputes relating to health and medical insurance generally involved complex and distressing circumstances.
"In many cases we are asked to decide between apparently conflicting positions taken by doctors and consultants, who are either advising the insurer or treating the consumer," it says.
"In these situations, we rarely find it helpful to seek yet further medical opinion - or to substitute the expertise of the specialists already involved with our own medical opinion.
"Instead, we press the parties and their medical advisers to focus on - and clarify - their medical opinions on the specific issues that are relevant to applying the terms of the policy fairly. In most cases, this focus will then enable us to reach our conclusion on what we believe is fair and reasonable in the individual circumstances of the case."
Whole of life policies are harder to assess as they are combined with savings endowments, but this area saw 2.5% of the new cases, with the total of 4,199 rising by 684.
Overall, the number of insurance disputes increased by 38%, making it responsible for 42% of new cases, a figure largely down to payment protection insurance (PPI), which accounted for three out of every ten new cases received by the FOS.
This was a 58% increase on the previous year, following a three-fold increase the year before.
Inside the insurance industry, sales and advice formed two thirds (66%) of complaints, with claims prompting 28%, and administration 6%.
Complaints about banking and credit also rose by 30%, while investments stayed at the same level, motor insurance disputes decreased by 13%, and pension complaints fell by 27%.
The FOS resolved a record 166,321 disputes, a 46% increase, resulting in compensation for consumers in 50% of cases.
