No-Claim Bonus in Health Insurance

NCB or No claim bonus in health insurance is the bonus your insurer rewards you on a claim-free year. You should pick a health insurance plan with the maximum No Claim Bonus/Cumulative Bonus for every claim-free year so that your sum insured increases.

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      What is a No Claim Bonus?

      A no claim bonus is a remunerative benefit offered to the policyholder in their health insurance policy. Also known as NCB, it is a modest way through which the insurance company rewards the policyholder for having a claim-free year. Under this benefit, a monetary benefit is provided to the insured if no claims are raised in the previous policy tenure. Thus, the no claim bonus is one of the most significant factors to consider while purchasing a health insurance plan in India.

      What Are the Types of No-Claim Bonus?

      In a health insurance policy, generally, there are two different types of no claim bonuses. They are:

      (i). Cumulative Bonus

      Under this benefit, if the policyholder has a claim-free year then the coverage amount or the sum insured of the policy increases by a certain percentage. However, the premium of the policy remains the same.

      For instance, you have purchased a health insurance plan of Rs5 lakh and the insurance company provides a no claim bonus of 5% for every claim-free year. If you have not made any claim for the first year of the policy then the sum insured of your policy will increase by 5% i.e. Rs 5.25 lakh with no change in the premium rate. Similarly, if you do not file any claim for two consecutive years, then the coverage amount of your policy will increase by 5% i.e. to Rs 5.5 lakh for the same premium rate. This means that in case you get hospitalized in the 3rd policy year, then you can file a claim up to Rs 5.5 lakh.

      (ii). Discount on Premium

      Under this type of no claim bonus, a discount on the renewal premium up to a specific percentage is offered for every claim-free year. The discount can either be used every claim-free year or can be accumulated for consecutive claim-free years to earn a bigger discount. However, the sum insured of the policy does not change.

      For example, suppose you have purchased a health insurance plan in India for a coverage amount of Rs 5 lakh in exchange for a premium of Rs 10,000 annually. The insurance company offers a discount of 5% on the renewal premium amount for every claim-free year as the no claim bonus, which comes to Rs 500. Therefore, at the time of policy renewal, you will have to pay Rs 9,500 as the premium for your policy while the sum insured of the policy will remain the same.

      How is No Claim Bonus Beneficial?

      Take a look at the reasons that make no claim bonus a beneficial benefit for policyholders:

      • No Claim Bonus helps you to ensure better financial protection for your family and yourself at the time of any medical emergencies.
      • It reduces the cost of renewing the health insurance policy by getting more coverage at a lower premium.
      • The benefit of a no claim bonus encourages the policyholder to stay healthy and fit and only file a claim when it is very much required.
      • No claim bonus is offered in individual and family health insurance by most of the health insurance companies in India. However, the terms and conditions of the policy may vary from one insurer to another.

      How Much Will the Sum Insured Increase under Cumulative Bonus?

      Although the policyholder can increase the sum insured of the policy through a cumulative bonus, it can be done up to a certain limit only. Generally, the coverage amount can be increased up to 50%-100% of the original sum insured. Since the terms and conditions for cumulative bonus vary for the different insurance providers, you must go through the policy documents to know the exact limit.

      For instance, let’s say you have a health insurance policy of Rs 2 lakh and your insurance company offers a cumulative bonus of up to 50%. In this case, the coverage amount of your health insurance policy can be increased maximum by Rs 1 Lakh, which is 50% of the base sum insured amount. Thus, your sum insured can increase up to a maximum of Rs 3 lakh.

      No Claim Bonus Applies to Individual As Well As Floater Health Insurance Plans in India

      No claim bonus is available under both individual and family health insurance plans. Under the individual health insurance policy, the coverage is offered only to the policyholder whereas the family floater health insurance policy provides coverage to the entire family. So, irrespective of whether you have an Individual health insurance plan or a floater health insurance plan, you can avail the benefit of a no-claim bonus if you do not make any claim in the previous policy year.

      Do All Health Insurance Plans in India Offer No Claim Bonus?

      No. Not every health insurance plan in India offers the facility of no claim bonus. The plans that do offer no claim bonus comes with their own terms and conditions. Thus, it is very crucial to read the policy documents in detail while purchasing the policy so that you know whether it offers the no claim bonus facility or not. Also, make sure that you clearly understand the terms and conditions of the policy pertaining to NCB. For instance, by how much the policy coverage can be increased, what is the % of NCB, etc. You can compare health insurance plans online based on the no claim bonus and accordingly, buy the most suitable plan for yourself.

      Wrapping it Up!

      In this day and age, the mushrooming cost of medical treatment and hospitalization has made it extremely difficult for the common man to avail of the right medical facility. No claim bonus is a lucrative way to enhance your health insurance policy coverage and ensure the safety of you and your loved ones against any type of medical emergency. Do remember to read the policy documents and understand the NCB terms before buying the policy.

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      *Product information is authentic and solely based on the information received from the Insurer. Policybazaar is acting only as a facilitator and claims settlement shall be at the sole discretion of the Insurer. Policybazaar does not provide any medical or surgical advice or diagnosis and is not responsible for your interactions / treatment by a medical practitioner/hospital. Please consult a registered medical practitioner for any medical or surgical advice. The Information that you obtain or receive from Policybazaar, and its employees, or otherwise on the Website is for informational purposes only. As per the Insurance guidelines, you are allowed to cancel the policy with-in 30 days from the date of Issuance of policy.This option is available incase of policies with a term of one year or more.

      *All the health insurance plans cover hospitalization expenses including COVID-19 treatment cover up to the specified limits. You can also buy specific COVID-19 health insurance policies such as Corona Kavach Policy and Corona Rakshak policy.

      **All savings and online discounts are provided by insurers as per IRDAI approved insurance plans. #Tax Benefits are subject to changes in tax laws. GST Exemptions depend on fulfilment of qualification criteria and submission of relevant documents.

      *₹1748/month is the starting price for a 1 crore health insurance for an 18-year-old male, with no pre-existing diseases. Discount on renewal premium is subject to the number of wellness points earned in the health insurance policy. For more details about the plans, please read the sale brochure carefully to get upto 100% discount on renewal premium.

      *₹400/month is the starting price for ₹ 5 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

      *₹541/month is the starting price for ₹ 10 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

      *₹762/month is the starting price for ₹ 1 Crore Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases

      *₹243/month(₹ 8/day) is the starting price for a 5 lakh health insurance for a 20-year-old male, non-smoker, living in Bengaluru with no pre-existing diseases

      *₹2020/month is the starting price for ₹ 1 Cr Health insurance for a 50 year old male & 50 years old female, living in Bangalore with no pre-existing diseases rounded off to nearest 10.

      *₹390/month (₹13 per day) is starting price for 1 cr. Health insurance for 25 years old male, with pre-existing diseases, residing from tier 1 city rounded off to the nearest 10.

      *No medical tests are required unless requested by the insurer’s underwriter. In-case of pre-existing diseases relevant medical proof would be required as per the terms and condition of the policy opted.

      *The values taken for effective cost calculation are indicative values and may change as per the selected plan.

      *Coverage upto double the amount of Sum Insured is available on certain covers for a minimum plan of Rs. 5 Lakh on the first claim only to an individual of upto 45 years of age with no pre-existing diseases. The benefit is available with or without extra cost depending on the plan chosen.

      *Coverage of pre-existing diseases is provided by insurer as per their underwriting policy.

      *The scope of coverage may vary from plan to plan.

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