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Recent times have raised the importance of having adequate insurance that provides holistic safety. The purpose of an insurance policy is to provide financial security in untoward times. However, there are several ways in which insurance coverage provides benefits, even during good times. One such benefit is the no-claim bonus in health insurance policies. The No-claim Bonus or NCB is a monetary benefit offered to policyholders in health insurance policies. It acts as compensation, given by the insurer to the policyholder, for having a claim-free year.
With the rising medical inflation and surging costs of hospitalization due to Covid, the benefit of a no-claim bonus solves a pressing demand. It increases the coverage amount of the policy to provide extensive coverage, or decreases the premium rate of the policy and offers the same services at a discounted cost. So this feature not only protects you and your loved ones but goes further to give back returns. Additionally, customers who are unhappy with their current insurer and wish to port their policy can even get the NCB transferred to the new insurer by way of an enhanced sum insured to the extent of the accrued NCB. Hence the no-claim bonus plays a crucial role in the purchase of a health insurance plan. NCB is offered in both individual as well as family floater health insurance plans. Let's understand the no-claim bonus in a health insurance plan.
There are two general ways in which the no-claim bonus works in a health insurance policy:
Cumulative Benefit means that if the policyholder has a claim-free year then the coverage amount of the policy increases, while the amount of premium of the policy remains the same. Let's say you buy health insurance of Rs.5 lakh with a no-claim bonus of 5% for each claim-free year. Now, if you do not file a claim that year, your coverage amount will increase up to Rs.5.25 lakh at the year-end but the premium rate will remain the same. Moreover, if you do not file any claim for the two consecutive years, then your coverage amount will increase up to Rs. 5.5 lakh with the same premium rate. Therefore, if you get hospitalized in the third year, you can file a claim of up to Rs. 5.5 lakh.
This option of a no-claim bonus decreases the premium rate of the policy by a specific percentage for every claim-free year, with no changes in the coverage amount of the policy. So on buying health insurance for a coverage amount of Rs.5 lakh and a premium of Rs. 10,000 annually, with a discount of 5% on the premium for a claim-free year as a no-claim bonus, you will have to pay Rs. 9,500 as a premium for your policy. Hence, even though the coverage of the policy will remain the same, you can ensure better financial protection for your family and yourself with both.
Policyholders are encouraged by the benefits of a no-claim bonus to stay healthy and only file a claim when it is necessary. In India, most health insurance companies offer the benefit of a no-claim bonus. However, the premium discount or amount of cumulative bonus of a policy is based on the terms and conditions of the respective insurer.
Most health insurance policies offer the option of increasing the coverage amount of the policy through a cumulative no-claim bonus by 50-100%. However, Care Plus policy offers a 200% increase in sum insured as a no-claim bonus. It means that this policy increases the sum insured by 50% for each claim-free year, and offers a sum insured of 200% at the end of four consecutive claim-free years.
In these times of uncertainty and caution, it is essential to be prepared with all-round protection. The Care Plus policy offers a wide range of new-age benefits, providing comprehensive coverage. In order to provide uninterrupted treatment for your loved one, the policy provides unlimited reinstatement of the sum insured for related as well as non-related illness, after the original sum insured gets exhausted. Another great feature of this policy is the No-claim Bonus Protect. While in most health policies, the no-claim bonus is lost even if you claim up to 10%, but in the no-claim bonus protect feature of Care Plus, there is no reduction in no-claim bonus in the subsequent year if the total claim amount is less than 25% of sum insured in a policy year. This unique feature not only increases the bracket of coverage but also helps you avail of the no-claim bonus despite making small claims. Further, the policy provides personal accident coverage for the primary insured, with a widespread network of 6500+ hospitals.
Despite its vitality, not all health insurance plans offer a no-claim bonus in India. Moreover, plans offering the facility of a no-claim bonus have their fixed terms and conditions. Therefore, it is very important to read thoroughly about the policy and make a well-informed decision. It is advised to make sure that you know the terms and conditions of the policy and whether it offers NCB, or by how much the policy coverage can be increased, etc. In today's time, a no-claim bonus is among the best ways to expand the health insurance coverage and ensure your safety as well as the safety of your loved ones against all medical emergencies.
07 May, 2021