No Claim Bonus (NCB) is a discount or an incentive offered by the insurer for not making insurance claims in the first (or previous) year of the policy. In the case of no-claim in the first year, most insured companies offer 5% extra on the sum assured. Most of the health insurance companies reward the policyholders for maintaining good health and not applying for any claim during the first year. This bonus can be availed when you renew the Bajaj health insurance policy.
There are two types of NCB. These include:
A progressive increase in the sum assured is known as a cumulative bonus.
The health insurance companies, which do not offer NCB, provide a rebate on the renewal premium to maintain their competitive edge.
Let us take an example to understand how an NCB is processed with Finserv Markets.
Suppose you have a health cover of Rs. 10 Lakh and under an NCB, the progressive increase in the sum assured is 5%. The cumulative bonus is Rs. 10.5 Lakh. If the claim-free period is two years, the increased sum assured will be –
Rs. 10.5 Lakh + (Rs. 10 Lakh*5%) = Rs. 11 Lakh.
Therefore, for each claim free year, you will receive an additional coverage of 5% on your base sum assured.
An important point to be noted is that the increase in sum assured for the subsequent year is calculated on the base sum insured and added to the previous year’s increased value.
You will not lose the benefits, but the quantum of your benefits will change based on whether you have switched from an individual to a family floater policy or from a family floater to an individual policy. It will also be seen whether the sum insured has increased or decreased.
The new co-policyholders will have to a complete one full year of claim-free period to avail of the benefits.
Every insurance company has a limit on the NCB. The amount of increase in the sum assured or the discount in premium amount depends upon insurance provider.
Certain insurance companies do provide add-on on the no claim insurance. This enhances the overall benefit of the policy.
If there is a claim made on two policies, the sum insured can be shared in the same proportions. However, as per the new IRDAI guidelines, you can now choose the insurance provider who will settle the claim.