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No-Claim Bonus in Health Insurance
The money added in the sum insured in a health insurance policy for a claim free year is called as NCB or No Claim Bonus. An insurance holder should purchase a policy offering the maximum percentage of NCB for every claim-free year, as with higher NCB your sum insured will also get maximized. But it is important to know and understand all about your policy details before buying a plan to understand NCB better.
What is No Claim Bonus in Health Insurance?
No claim bonus health insurance is a financial reward or bonus awarded to the owner of a policy in the sum insured if he/she doesn’t claim any medical coverage for a year. So, if a policy owner doesn’t fall sick or doesn’t claim health insurance for a year, he/she can receive the NCB as bonus reward.
NCB is a humble way through which insurance companies offer incentives to the policy owners for a no claim year. The policy owner can gain this monetary reward year upon year for making no claims. Thus, the No Claim Bonus is one of the most significant aspects to consider while choosing a health plan.
Types of No-Claim Bonus
Health insurance companies normally offer two types of no-claim bonus.
- Cumulative Bonus &
- Discount on premium
Cumulative Bonus
Cumulative bonus is a benefit that is presented to the policy owner. Under cumulative bonus, for a claim-free year, the policy owner enjoys an increase in the sum insured by a certain percentage. However, this doesn’t affect the premium of the policy, which remains the same.
For instance, Rajiv bought a health insurance plan of Rs. 5,00,000, where he was assured by the insurance company a 5% No Claim bonus for each claim-free year. Now, he didn’t make any claims in the first year as neither he, nor anyone else in the family required a coverage for that year. So, his policy amount or sum insured for his policy increased by 5% to Rs. 5, 25,000. However, the premium he was paying remained the same. Thus, now Rajiv can use this entire amount with the added reward in case he needs to make a claim in the 3rd year of his policy.
Discount on Premium
In case of discount on premium, the policy owner gets advantage of a decrease in the renewal premium rate by a certain percentage for every claim-less year. However, in this case no changes were made to the amount of sum insured in your policy.
For instance, Shelly bought a health insurance policy of Rs 5,00,000 where she paid Rs.10,000 as annual premium. She was offered a 5% discount on renewal premium by the insurance company for each claim-free year as No Claim Bonus. Now, she didn’t use any coverage for the first year, so the company offered her a discount at the time of policy renewal. Thus, she has to pay Rs. 9,500 as the premium policy now. However, the sum insured in this case stayed the same.
Benefits of No Claim Bonus
Here are the benefits that a health insurance No Claim Bonus offers for policy owners:
- With No Claim Bonus, you can ensure better coverage to you and your family during a medical emergency.
- It lowers the renewing cost of a medical policy as you can get more coverage while paying the same premium.
- It encourages people to stay fit so that less claims are made. Motivating people to stay healthy by adopting a healthy lifestyle
- No claim bonus is offered in case of both personal or individual and family health insurances. However, depending on the insurance company, the terms and conditions of No Claim Bonus might vary.
How much increase in sum insured is possible under Cumulative Bonus
Under cumulative bonus, the policy owner can have a gain of increase in the sum insured, but this gain is to a certain limit only. However, in general, the sum insured can be increased from 50% to 100% of the actual insured amount. But, you must note that terms and conditions for cumulative bonus differs depending on the insurance providers. And reading the policy document is a must to know the exact limit of the No Claim Bonus.
Does No Claim Bonus apply to both individual and family insurance plans
Yes, both individual and floater insurance plans offer No Claim Bonus. The individual health plan covers only the policy owner, while in case of floater plan coverage is offered to the entire family. And no matter what the insurance plan is, individual or floater, the benefit of NCB is available in both type of plans if the insured person hasn’t made use of the any claims in the entire policy year.
Does all health insurance plans offer No Claim Bonus
All health insurance plans available in India might not offer No Claim Bonus. However, the policies that do not offer NCB come up with other rewards and offers for the insurance holder. So, every policy owner must read the policy document very carefully before purchasing a plan to know if it offers no claim bonus or other worthwhile benefits.
No-Claim Bonus in Health Insurance
An NCB is a reward from your insurer that motivates you to drive safely because fewer damages lead to fewer claims, which results in a higher NCB. Depending on how many years you go without filing an insurance claim, a no claim bonus enables you to save 20 to 50% on your insurance premiums.
What the No Claim Bonus is. No-claim bonus (NCB) is a premium reduction provided by insurance companies to vehicle owners who have not filed any claims during the duration of their motor insurance policy. The no-claim bonus is given to the vehicle owner as a reward for their careful handling of the vehicle.
You must have standalone damage coverage or comprehensive auto insurance to be eligible for NCB. If your only liability insurance is for third parties, you are not qualified for NCB. Claims from third parties have no impact on the NCB component.
In the context of health insurance, a no-claim bonus is a monetary award given to policyholders for each year they avoid filing a claim. Because you maintained your health throughout the policy period and made no claims under your health insurance policy, you are eligible for the reward.
Author Bio
Paybima Team
Paybima is an Indian insurance aggregator on a mission to make insurance simple for people. Paybima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. Paybima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
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The money added in the sum insured in a health insurance policy for a claim free year is called as NCB or No Claim Bonus. An insurance holder should purchase a policy offering the maximum percentage of NCB for every claim-free year, as with higher NCB your sum insured will also get maximized. But it is important to know and understand all about your policy details before buying a plan to understand NCB better.
New India Assurance is a leading name in the general insurance industry. It offers a range of health insurance products and its senior citizen health insurance policy is one of the best health insurance for senior citizens. The policy can be taken by any individual in the age bracket of 60 years and 80 years. Renewals under the plan, however, are not allowed lifelong. The maximum cover ceasing age is 90 years. Know more about its features, coverage, discount, claim process etc.
There was a time when having a health insurance was considered as a symbol of opulence. The rich and famous could afford buying insurances and the common middle class people never considered it as a necessity. However, things have changed entirely now and almost everyone with a decent job and salary wants to buy an health insurance to cover himself/herself as well as to cover his/her family so that they don’t have to undergo any untoward situation due to lack of funds in case of any medical emergency. And since medical emergencies can knock anyone at any time, it is important for everyone to have a medical insurance for self and for family.
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