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No Claim Bonus in Health Insurance

Features and Benefits of NCB in Health Insurance

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7.5% Discount
10% Discount

Your premium is Rs.

Above Premium includes 18% GST

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94%

Claim Settlement Ratio (OND 2018)

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8100 +

Network Hospitals across 500 cities

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400 Lacs+

Lives covered

No Claim Bonus in health insurance is the bonus amount that you get from the insurer under your health insurance policy for not claiming during your policy tenure. It gets accumulated to the sum insured for every claim-free year. It makes you strong to face any medical emergency in the future and an incentive for being healthy.

Table of Content:

What is No Claim Bonus in Health Insurance?

A no claim bonus in health insurance refers to the additional coverage that is provided by the insurer to the insured if no claim has been made by the insured party during the policy year. There are two types of no claim bonuses:

  • Discount on premium: It is generally given as a monetary bonus during the time of renewal.
  • Cumulative Benefit: Yearly increase in the sum insured in place of the no claim bonus. Typically, this is an additional 5% added to the sum insured.

How does No Claim Bonus Work (NCB)?

Having a medical insurance plan is a great help in times of emergencies. The ultimate aim of such plans is to provide financial comfort to a family as hospital bills are either reimbursed or settled through a cashless medical insurance claim facility by insurers. Sometimes, policyholders may not need to make a claim. The reason could be that they managed to stay healthy that saved them from hospital expenses or they decided to pay the hospital bills themselves in the case the expenses were affordable. In both cases, they are entitled to a no-claim bonus under their health plan.

Let us take an example:

Vijay purchased a health policy for his family with a total coverage amount of Rs 5 Lakh. The insurer provides a no claim bonus with an increase in sum assured every year at a rate of 5% with a maximum limit of 50%.

Now, let us take a look at how much coverage he would be eligible for at the end of every claim-free year.

  • After the first claim-free year, the sum insured = 5 Lakhs 25 Thousand
  • After the second claim-free year, the sum insured = Rs 5 Lakhs 50 Thousand

In case, Vijay claims in the third year, his available sum insured will be taken into consideration.

Types of No Claim Bonus in Health Insurance

No-claim bonuses provide an added cushion to your finances and ensure a secure future for your family. The benefit of no-claim bonus in health insurance can be provided by an insurer in two ways, as discussed below:

Cumulative Benefit:

The policyholder is entitled to cumulative benefit under a no-claim bonus (NCB) feature, wherein the sum insured amount increases by a specified percentage in every claim-free year. The percentage ranges between 5% and 10%, and there is a maximum limit to the increase, usually, 50% of the original sum insured.

This way the coverage amount gets accumulated and offers additional financial cushion for the policyholder.

Discount on Premium:

There is another way in which a no-claim bonus (NCB)in health insurance works. The benefit is offered to the policyholder in terms of discounts on the premium at the time of renewal of the insurance policy. Under this cost-saving feature, the sum insured amount remains the same while the insurance premium is lesser. Discounts are advantageous as the policyholders can avail of all the benefits and coverage under their health policy at an affordable premium.

Features of No Claim Bonus (NCB)

If you are planning to buy a health insurance plan and wondering on what factors you should take the policy, consider no claim bonus cover. You can read it's below features:

  • It is an incentive above the Sum Insured that will accumulate after every claim-free year.
  • If there is no claim in the first year then the insurer offers 5% extra on the sum assured.
  • In the case of family floater plans, all the members who are covered under the policy are entitled to no claim bonus.

Benefits of NCB in Health Insurance

No Claim Bonus in health insurance offers unique benefits to the policyholder. However, different insurers have different policies about this feature. Yet, the common benefits that policyholder get include:

  • Maximum coverage as the sum insured does not go below the original value even after multiple claims
  • No Claim Bonus encourages policyholders to remain hale and hearty, and enjoy claim-free year
  • It minimizes cases of fraud or unnecessary claims
  • The percentage of reward amount ranges from 5% to 10% for every claim-free year
  • No Claim Bonus can be easily transferred during the portability
  • Helps as a financial cushion in times of rising healthcare costs

>> Also Read: Health Insurance Claim Settlement Ratio

No Claim Bonus in Religare Health Insurance

Religare Health Insurance offers bonuses to the policyholders for spending a year without making any claim on their insurance policy. The no-claim bonus (NCB) feature is an advantage as it entitles them to make huge savings. The NCB in health insurance is offered as:

  • Cumulative bonus amount which gets accumulated to the sum insured every year. The sum insured gets increased by an additional 10% up to the maximum limit of 50% in five successive years.
  • Discounts on premiums are available on the health insurance policy at the time of policy renewal. A policyholder with a low claim record gets a rebate on the premium along with additional features in the health policy.

This way, the policyholders can enjoy additional coverage that will help them face medical emergencies and get quality treatment without any worry. Medical inflation is at a rate of 15% every year. As the healthcare costs in India are rising steadily, the NCB offered by Religare Health Insurance proves to be highly beneficial.

No claim bonus in health insurance is among the useful features of medical insurance policies which should be considered by policy buyers since it helps in saving on medical expenditures.

FAQs on Health Insurance No Claim Bonus

What Happens to No Claim Bonus in Health Insurance if I Don’t Renew My Policy?

Every health insurance policy has a definite tenure, usually for one year. Some plans are also available for longer-term periods, say for a two, three or five continuous years. In such cases, the policyholders have the option to pay a one-time premium for all these years and save themselves from the hassles of renewing the policy each year.

However, in the case where the policy must be renewed before the expiry date by an insured person and if he or she fails to do so, the policy would lapse.

In such an event, the policyholder will not be entitled to the benefits that come with the renewal of health policy. That is, the accumulated coverage amount that comes under no-claim bonus would not be available to the policyholders if they do not renew their policies on time.

What Happens to Health Insurance No Claim Bonus if I Switch from an Individual to a Family Floater Plan?

One of the advantages policyholders have under health insurance plans is the option to change their plan from individual to a family floater health insurance. By changing an individual policy to the family floater, the benefits accumulated in the previous policy can be made available to other members of the family under the new policy. The benefits would also include the no-claim bonus feature given by the insurer. However, the sum insured amount or the percentage can vary and it would depend on whether the plan was changed from individual to family floater or vice versa. Moreover, whether there was an increase in the sum insured amount or not is also another factor that is taken into account.

How to Claim No Claim Bonus in Health Insurance?

It is estimated that medical inflation is rising at a rate of 15% every year. Healthcare services are skyrocketing, and it will be difficult to bear the medical costs in the coming future. In such a debilitating situation, no claim bonus in health insurance can be extremely helpful, and you can avail no claim bonus in two ways:

  • Cumulative benefits in the form of the higher sum insured
  • Discount on the premium amount

In both ways, you get financial security. However, the terms and conditions of your insurance policy may influence its amount.

For Example:

Assume that you have health insurance with the sum insured of Rs.5 lakh. You didn’t claim for the first year. In that case, your insurer offers you 5% of cumulative of no claim bonus with a maximum of 50%. So, the total sum insured after every claim-free year is:

  • For 1st Claim, Free Year Sum Insured = Rs.525000
  • For 2nd Claim, Free Year Sum Insured = Rs.550000 and so on.

When is No Claim Bonus Offered in Health Insurance?

No claim bonus in health insurance is offered to the insured policyholder when they are going to renew the health insurance policy. Insurers also offer no claim bonus during the term of the health insurance policy. There can be a boost in the sum insured, in the form of a bonus that cumulatively increases in value instead of the usual no claim bonus. Those companies that don’t offer a no claim bonus typically offer a rebate on the premium for renewal so that it can stand with the competition. Religare Health Insurance offers a no claim bonus of 10% to the sum insured, up to a maximum no claim bonus limit of 50% in 5 successive years.

No Claim Bonus in health insurance is usually applied under the following conditions:

  • If a low-value claim is made by the insured individual, the No Claim Bonus is not forgone entirely. A fraction of the total sum reserved for the bonus will be deducted in proportion to the size of the claim.
  • Typically, if a policy is renewed within 30 days of the due date for renewal, the No Claim Bonus can act as a discount of the payable premium for health insurance.
  • Moreover, should the insured want to shift health insurance policy providers, then the No Claim Bonus that has accumulated for the previous health insurance policy can be transferred to the new health insurance policy.
  • If the policyholder has a low claim record, he can get a rebate on the health insurance premium that needed to be paid, along with certain extra features in the policy.

In summary, a no claim bonus in health insurance is amongst the key features that you should consider before purchasing a policy. Insurance plans that offer substantial bonuses while imposing only minor penalties for low-cost claims can serve their purpose well and prove to be highly conducive to your needs.

The current medical inflation is affecting the healthcare industry immensely. Hence, if you want to save your hard-earned money and get the most out of your health insurance policy then stay fit and avail of no claim bonus.

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