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What is No Claim Bonus in Health Insurance & Its Benefits

​​No claim bonus is an amazing benefit the policyholder can enjoy on his health insurance. No claim bonus or NCB in health insurance is bonus money added in the sum insured for every claim free year. It is like a reward that policyholder receives for not claiming on his health insurance. This article will help you to understand everything about no claim bonus benefit on health insurance.

What are the types of No-claim bonus?

There are two main ways through which the insurance companies give the advantage of no-claim bonus on their health insurances:

  1. Cumulative Benefit meaning higher sum insured.  
  2. Discount on premium.

In either way, you get better financial security at the times of medical emergency. No claim bonus is a way through which, insurers encourage their consumers to stay healthy and file claim only when it is necessary.

Most of the insurance companies in India offer the no-claim bonus benefit on their health insurance products. However, the terms of conditions of the respective insurance company influence the amount of cumulative bonus or discount on the premium. Mostly, insurance companies tend to offer a cumulative bonus with a significant increase in the sum insured for every claim free year with a set limit for the maximum amount. Generally, this limit is up to 50% on NCB.

How does NCB work in health insurance?

It is unlikely for the majority of policyholders to claim on their health insurances during every year after the purchase. Sometimes, the hospital expenses are affordable and you may choose to pay from your own pockets, which eventually makes you eligible for no claim bonus.

For example, assume you have a no claim health insurance​ with sum insured Rs. 4 lakhs. Your insurer offers you 5% of cumulative NCB in health insurance for every claim-free year with a maximum of 50%. Thus, the total sum insured available for you after every claim free year would be,

  • After a 1st claim-free year the sum insured= Rs. 4 lakhs 20 thousand
  • After a 2nd claim-free year the sum insured= Rs. 4 lakhs 40 thousand
  • After a 3rd claim-free year the sum insured= Rs. 4 lakhs 60 thousand​

As the limit for NCB in health insurance provided by your insurer is 50%, the total sum insured available for you becomes Rs. 6 lakhs. No-claim bonus enables you for maximum coverage with an increased sum insured amount every year.

Furthermore, the option of portability is applicable to NCB. This means the NCB you acquired for every claim-free year is transferrable to another policy with the same or different insurance.

How the no-claim bonus is beneficial?

The current rate of inflation is 10 to 12 per cent and is affecting effects on the health care industry. As a result, the cost of medical services is rising at a significant rate. In such times, having a no-claim bonus health insurance is like an aid because you get help at the time of actual need.