Do you feel guilty for working with an organization where your ethics and integrity is not matching though you are very well paid?

Yes, I will feel guilty and I will resign.

Yes, of course

This means betrayal of trustees, lack of responsibility and lack of conscience

You must resign and seek a decent job

Do I feel guilty?. If I knew about any company do that, I will immediately call the police.

Ethics & integrity is part of my character regardless of how much i get paid, i ought to uphold to them whether am been seen or not.

Definitely.Ethical standards are part and parcel of the successful work of the institutionDespite good pay, it is also important to take into consideration the ethics of work and professionalism

Yes, I would feel absolutely guilty and would work towards bringing a change in the organization's view towards the ethics and towards developing employees to better their business etiquette. 

i will never join this kind of environment anywhere in this world 

Yes I do and will seek ways to amend the situation

Yes of course. I will leave the employent.

Why should you denying the insurance claims if all data's valid and correct align with the terms and conditions of insurance policy? You said that working for organization what has good integrity and ethics. If you though to bring benefit for organization, it means, you have not good ethics and integrity, but if your boss said to refuse the claim, so you should try another way to establish communication with the top level and explain the issue, why you should deciding to refuse the claim under your boss instruction. I am not sure that you have single point to decide the issue met, because you have a boss. When your boss instructed the decision, you can ask to your boss, the decision should not your involvement on the issue met. Let your boss decided by himself, then see what will happen in the future. You should has personal integrity and ethics align with the vision and mission of organization.

Put yourself at the other end of the call or claim and think would you be happy with the treatment being meted out.

Hopefully YOUR moral and ethical code should provide you with an answer.