No Claim Bonus in Health Insurance

Know in detail about No Claim Bonus (NCB) and its benefits in health insurance.
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No Claim Bonus in Health Insurance
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3 mins
22-March-2023

No Claim Bonus (NCB), also known as cumulative bonus is a reward for every claim-free year given by the insurer to you. You can benefit from this bonus by increasing your sum insured on health insurance or by getting a discount on premiums.

Read on to know more about No Claim Bonus in health insurance and how you can get the maximum sum insured through this bonus.

What is a No Claim Bonus in health insurance?

No Claim Bonus (NCB) is one of the most popular benefits offered on a health insurance policy. It is an insurer's way of rewarding you for having claim-free years and renewing your policy with them. Basically, you get a reward for leading a healthy life and not making any claims in a policy year. You can accumulate up to a 50% bonus if you have had five consecutive claim-free years. This bonus then adds up to your sum insured on the health insurance policy. So, you get more than the sum insured on the same policy premium.

Different types of No Claim Bonus 

NCB in health insurance, there are two types of No Claim Bonus.

● Discount on premium

One of the ways insurers give the NCB is through a discount on your renewal premium. This helps you reduce your policy premium during renewal. However, your sum insured will remain intact.

● Higher sum insured

Most health insurance companies offer NCB as a cumulative benefit on your health insurance policies. This means that you can increase your sum insured based on the NCB accumulated without paying additional premium.

Benefits of No Claim Bonus (NCB) in health insurance

There are multiple advantages of the No Claim Bonus feature in health insurance.

● Financial protection

NCB lets you upgrade your policy to fit all your requirements without worrying about paying the entire premium. This is because you can utilise the bonus as a discount on the premium. Thus, you get comprehensive coverage for health emergencies.

● Increased sum insured

NCB lets you increase the sum insured of your health insurance policy while maintaining the same premium value. This helps you get maximum financial support at the time of need.

● Portability

NCB in health insurance is transferable. Suppose you switch to a different insurance company. In that case, the bonus you gained all these years will remain and is applicable. You can get it transferred to the new insurance provider. Check porting in health insurance.

How does No Claim Bonus work in health insurance?

The calculation of No Claim Bonus for health insurance depends on the type of NCB offered by the insurer. The scenarios are explained below.

In case of discount on premium:

Suppose Mr. X bought a policy with a sum insured of Rs. 10 lakh and an annual premium of Rs. 5,000. Since he did not claim the policy during the policy period, the insurer offered a discount of 10% on the annual premium. As a result, Mr. X will only have to pay Rs. 4,500 to renew the plan, saving him Rs. 500.

In case of higher sum insured:

Suppose Mr. X has a policy of Rs. 10 lakh and he did not make a claim during the policy year. While renewing the plan, the insurer offers him an additional sum insured of 10%. As a result, the revised sum insured offered by the policy becomes Rs. 11 lakh. Suppose he does not claim the policy even in the next policy year. In that case, the sum insured will increase to Rs. 12 lakh due to the cumulative benefit. However, a cumulative bonus usually comes with a limit of 50%. This means that the additional sum insured cannot go up to more than 50% of the original value. So, for five consecutive claim-free years, Mr. X will be eligible for a maximum sum insured of up to Rs. 15 lakh. The policy document will state the percentage of the cumulative benefit that the policy offers. It also varies from insurer to insurer.

What is the add-on cover for No Claim Bonus in health insurance?

Some insurers offer No Claim Bonus protection cover as an add-on. This allows the policyholders to retain their NCB even after an insurance claim during their policy period. You can buy this add-on by paying an additional premium while buying the policy. It is advisable to understand your insurance policy, read the policy document carefully, and evaluate the add-ons based on your needs before purchasing the best health insurance policy.

Is No Claim Bonus applicable for both individual and family floater policies?

Individual health plans cover only the policyholder, while family floater plans provide health insurance coverage for the entire family. NCB is applicable for both individual and family floater plans provided the insured member does not make any claim during the policy year.

Is No Claim Bonus offered by all health insurance policies?

Not all health insurance policies provide No Claim Bonus. Additionally, the terms and conditions for NCB may differ from policy to policy. Read the policy document carefully to know if NCB is applicable and what is the extent of the discount it offers.

The additional funds acquired from an NCB in health insurance also help you save money and get the best healthcare facilities without worrying about funds. Therefore, check with your insurance companies about the NCB benefit before purchasing insurance.

Frequently asked questions

What happens to the No Claim Bonus if I do not renew my policy?

If you do not renew your policy within the stipulated time, you will lose your No Claim Bonus (NCB) benefit entirely. The NCB provides a discount on your premium for every claim-free year, and if you fail to renew your policy on time, you will not be eligible for this discount.

Do we get NCB on health insurance?

Yes, you can avail of the NCB benefit on health insurance policies. If you do not make any claims during the policy term, you will be eligible for a discount on the premium for the following year. It encourages you to stay healthy and avoid hospitalisation.

What is the NCB amount in health insurance?

The NCB amount in health insurance varies from one insurer to another. Usually, insurers provide a discount of around 5-10% for every claim-free year. The maximum discount can go up to 50% after five years of the claim-free policy period.

Will I lose my No Claim Bonus if I change my insurance policy company?

No, you will not lose your NCB if you change your insurance policy company. You can transfer your NCB to the new insurer while renewing your policy. It is called NCB retention or NCB portability, and you can get up to 50% discount on your premium depending upon the number of claim-free years.

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Disclaimer

Bajaj Finance Ltd. (BFL) is merely a distributor of third party products from Assistance Services providers such as CPP Assistance Services Pvt Ltd, Bajaj Finserv Health Ltd.(BFHL), AWP Assistance India Pvt. Ltd. (Allianz), Doc Online Health India Pvt Ltd. etc. Issuance of the product is at sole discretion of Assistance Company or Services provider . The product and services or benefits assured under the product shall be governed by respective partner’s product T&C’s and BFL does NOT hold any responsibility for the issuance, quality, serviceability, maintenance and any claims post sale. Your purchase of an assistance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any product. For more details on terms and conditions, inclusions and exclusions please read the product sales brochure carefully before purchase or subscription. All product information such as membership fees, benefits, exclusions, value added services, etc. are authentic and solely based on the information received from the respective value added service provider or Assistance company.

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