health insurance

In health insurance, a no-claims bonus is a financial benefit that policyholders can enjoy for every year that passes without a claim. NCB is a money-back bonus added to a policy’s sum insured for every year that passes without a claim.

You will learn all about the health insurance no-claim bonus benefit from this article. It is a reward that policyholders receive when they do not claim their health insurance. Health insurance products offered in India generally include the no-claim bonus feature. However, the terms and conditions of the different insurance companies affect the amount of cumulative bonus or discount on the premium. 

A common insurance company practice is to provide a bonus for each year without a claim with an increase in the amount insured up to a certain amount. The rules for this generally range from 50% up to 100%. NCB in insurance is becoming popular in present times & this benefit is availed by many.

How does NCB work?

In general, many policyholders will not make claims on their health insurance during the first few years after the purchase. In some cases, the hospital charges may be affordable, enabling you to pay out of pocket and qualify for health insurance no-claim bonuses.

You have a health insurance policy with a sum insured of Rs. 6 lakhs. Your insurer offers you 5% of the cumulative NCB for each claim-free year up to 50%. Thus, the total amount insured after each claim-free year will be:

After the first claim-free year, the Sum Insured will be ₹6 lakhs + ₹30,000= ₹6,30,000

After the 2nd claim free year, the sum insured will be ₹6,30,000+ ₹30,000= ₹6,60,000

After the 3rd  claim-free year, the Sum Insured will be ₹6,60,000+₹30,000= ₹6,90,000

According to the limit of 50% in NCB, the total sum insured available for you becomes & ₹9,00,000. The no-claim bonus makes it possible for you to increase the amount you are covered by each year, and you also have the option of portability for your NCB achievements every year. This means that whatever NCB you receive for every claim-free year can be transferred to another policy.

Features of no claim bonus:

  • The policyholder will eventually benefit from it, along with the insured amount. The reward is accumulated every year he or she is claim-free and accumulates over time.
  • If you do not claim during the year, you will get 10% more on the total amount insured
  • If your family is protected by a family floater plan, all members of your household are eligible for a No Claim Bonus.
  • In today’s medical inflationary environment, hospitalization and other health-related expenses have substantially risen. Under such circumstances, a no-claims bonus can be a real boon to your health insurance coverage. So stay fit and healthy to take full advantage of your health insurance coverage.

Important things to know about No Claim Bonus:

  • Two types of bonus: Unlike car insurance, insurance companies offer no claim bonuses in a couple of ways – (1) a cumulative bonus and (2) a discount. In the event of a claim-free year, when the number of insured pixels is increased, but the amount of your premium remains the same, they contribute to your cumulative no claim bonus. During the no-claim bonus period, the premium level decreases by a certain percentage with every claim-free year, while the coverage amount doesn’t change.
  • Limit on coverage: Health insurance coverage amounts are enhanced through cumulative no claim bonuses, but they are limited. Usually, these limits range between 50 percent and 100 percent. And terms and conditions may differ by insurer. 
  • No applicability for individual &floater health policy: When you have an individual policy, you have health insurance only for yourself, while floater policies cover you and your family when you do not make any claims throughout the year. You, therefore, receive a no-claim bonus if you have an individual policy and never make any claims.For members of a floater policy, if they do not make any health insurance claims during the previous year, they earn a no-claims bonus the following year.
  • Every insurer doesn’t provide NCB:No claim bonus can be applied only to certain health insurance policies. Each health insurance copy has its terms and conditions. Read the fine print to find out whether a policy includes a no-claim bonus. When you buy health insurance, you should inquire about the terms and conditions, like the percentage of no claim bonus, the amount of coverage that can be increased, etc. No claim bonus is one of the most important factors to consider when choosing a plan.

Keeping claim records clean is important since many insurance companies will increase your premium if you register claims all the time. Staying fit is the key to avoiding getting sick and making claims. Your no-claim bonus or cumulative bonus will keep increasing over time, covering you when you need it most.

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