No Claim Bonus in health insurance is a type of monetary benefit given to the policyholders for each claim-free year. There are two ways in which NCB in health insurance works. In the first instance, the sum insured under a health insurance plan will increase for the policyholder for each claim-free year. Alternatively, if the policyholder does not make any claims during a policy year, the insurance provider might reduce their insurance premium cost at the time of renewal.
Primarily, there are two types of NCB in health insurance that you should know about. Here are all the details about them.
In this type of No Claim Bonus, you get the benefit of a progressive increase in the sum insured. So, if you make no claims throughout the policy tenure, your sum assured increases year after year progressively, for every claim-free year. This is known as a cumulative bonus.
Another kind of NCB is a discount on your health insurance renewal premium. In this case, if you have a claim-free year, the insurance provider will give you a discount on the health insurance premium when you renew your policy next year. The sum assured in this case will not be affected by the reduced premium.
Following are the various features you get to enjoy with a no-claim bonus in health insurance:
No claim bonus or NCB in health insurance can be availed by any insured member in case of a family floater plan
When you shift to new health insurance, the accumulated no claim bonus from existing health plan can still be used
A discount of up to 20% can be availed during policy renewal, if you have NCB
A no claim bonus is terminated once you raise a claim
Purchasing a no claim bonus add-on can give you free claims up to 3 times without losing your NCB
Not making a claim during your policy tenure can be helpful in more than one way. You earn a no-claim bonus, which is quite beneficial and cuts the burden of health plan costs on an individual. It is applicable for both individual and family floater plans. Check out the benefits of a no claim bonus:
No claim bonus cuts on the policy renewal cost at the time of renewal
Since no claim bonus is accumulated by making zero claims in a policy year, it restricts the policyholders from making unnecessary claims and motivates them to stay healthy
Almost all the health insurance plans, be it individual or family floater, offer NCB features. So, people have all the liberty to choose their ideal plan.
To understand how the No Claim Bonus in health insurance works, you need to look at an example for each kind of NCB as explained above. Let us look into a couple of instances that can offer more clarity on how NCB in health insurance works.
Say you have a health insurance plan that offers no claim bonus in the form of a 10% increase in insurance coverage. And let us assume that the initial coverage offered at the time of purchase is ₹ 2,00,000.
Now, if you do not raise any claim on the policy during the policy term, your insurance coverage will increase by 10%, to ₹ 2,20,000 upon renewal, all thanks to your no claim bonus.
Now, let’s say you have a health insurance plan that offers no claim bonus as a discount on your renewal premium. And say you initially have to pay ₹ 10,000 as premium annually when you purchase the plan.
After a claim-free year, when you have to renew the policy, your renewal premium will be less than ₹ 10,000, thanks to the discount offered. The exact amount of discount depends on the terms and conditions of the policy.
In the case of a health insurance plan that offers NCB, no claim bonus, in the form of increased coverage, there is no set percentage by which the sum insured will increase. The percentage of increase will depend on the insurance provider and on the policy you choose.
This is why it is essential to read your policy document carefully and check the terms and conditions thoroughly before you make your purchase.
Let us take the case of two different policyholders to understand no claim bonus better. We have two policyholders - each of whom is about to purchase a health insurance plan.
The first policyholder wants his insurance coverage to increase in the future, so he opts for a policy with a no claim bonus in the form of an increased sum assured for every policy-free year, by 10%. Initially, the sum assured is ₹ 10 Lakhs. But after one claim-free year, his coverage increases to ₹ 11 lakh. This continues until the sum assured reaches the limit set by the insurer.
The second policyholder, on the other hand, wants to reduce his future insurance costs. So, he opts for a policy that gives discounts on the renewal premium instead. Each claim-free year brings down his insurance premium by 5%. So, in the first year, he paid an annual premium of ₹ 10,000. In the second year, this became ₹ 9,500. In this manner, the discounts continued till the limit mentioned in the plan’s terms and conditions.
Before you go ahead and buy a health insurance plan that offers a no claim bonus benefit, you need to know some important things about this feature. Some of these essentials are explained below.
As you have seen above, no claim bonus can either give you increased coverage or a reduced premium. However, neither the increase nor the discount is indefinite. There is a cap on the amount up to which your coverage can increase, or below which your premium cannot reduce.
No claim bonus benefits can be available on both individual as well as family floater health insurance plans. So, in case of a family cover, if any member raises a claim, the NCB will not be applicable for that year.
The terms and conditions of the NCB in health insurance on each policy will be different. So, make sure that you read the details thoroughly before making your purchase. This way, you will be aware of the benefits as well as the limits on your plan’s NCB.
No. Not all health insurance policies in India offer a no claim bonus. While most plans do, there are some policies that do not offer this feature. This is why it is important to do your due diligence before you purchase your policy
If you are unsure about whether or not your policy offers NCB, no claim bonus, you can always check with your insurance provider if this feature is available.
This depends on the terms and conditions of your old and your new health insurance plans. Typically, you will not lose the benefits. However, the level of benefits may change depending on the new plan you have taken.
You cannot enjoy the benefit of a No Claim Bonus in the first year of the policy. You need to complete one full year without raising a health insurance claim to avail the NCB benefits.
There is a limit on the maximum amount of discount that the insurer offers on the renewal premium. Typically, this will be restricted and will not be as high as 100%, since that means your premium will effectively be zero. So, it is not possible to get a 100% discount.
In most cases, the insurer will decide whether a plan offers an increasing sum insured or discounts on premiums. You can read the policy documents and the terms and conditions to see what kind of benefits are offered, and you can choose a plan that meets your needs.
Yes, both individual and family floater plans can offer NCB benefits. You can check the policy documents to see if your family floater health insurance plan offers these benefits.
Renewing your health insurance policy is as crucial as buying it. If you fail to renew your policy within the deadline, you will be given a grace period. If you fail to renew the health policy even during this grace period, the policy will be terminated. Your NCB in health insurance will also be terminated if you do not renew the policy within 90 days of the date of policy expiry.
To increase the percentage of your no claim bonus you can purchase a no-claim bonus protect add-on. Not only will it boost your no claim bonus value but also give you a few free claims for a policy year. Most companies offer up to 2 free claims with the NCB protect add-on, however, it may vary from company to company.