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All you need to Know about No-Claim Bonus in Health Insurance

Updated On Dec 31, 2020

The No Claim Bonus in health insurance is a reward offered to the policyholder for not making any claims in the policy year. The no claim bonus (NCB), in health insurance is rewarded as an increase in the sum insured, a discount in the premiums when the plan is renewed, and also as discount vouchers on products related to health and wellness.

All you need to Know about No-Claim Bonus in Health Insurance

Features of the No Claim Bonus in Health Insurance

The no-claims bonus is offered as a reward for the policyholders for staying healthy and not making a claim against hospital expenses. This is applicable for the family floater plans as well, where all the members of the family are entitled for the no-claim bonus. Some key facts of the NCB are as follows:

  • If the bonus is credited with the sum insured, the rate of increase is about 5% to 50%, depending on the policy that one chooses.
  • If the bonus is offered as premium discounts, then a discount of 5% to 10% is allowed.
  • If the insured makes a claim, then the no-claim bonus is reduced by a specific percentage and no bonus will be made during the claim year.

The NCB is an incentive for not making claims and accumulates with every claim free year. Above all, the no-claim bonus is transferable and can be ported when the individual shifts from an existing health insurance plan to a new plan either within the existing or to a new insurance company.

Benefits of No Claim Bonus in Health Insurance

The no-claim feature of the health insurance offers some unique benefits to the policyholders such as:

  • Increase in the Base Sum Assured: As the bonus is accumulated in the sum insured, it could be used to pay a huge medical expense in the future. As healthcare costs are increasing steadily, the accumulated bonus can be used to handle huge medical bills.
  • The NCB is Transferable: The no-claim bonus is easily transferred during policy portability and thus the benefits accrued by the policyholder will never go waste.
  • Financial Cushion: It serves as a financial cushion for the entire family to pay for medical emergencies. Also, the sum insured does not go below the original value, even after multiple claims.

Loss of No Claim Bonus

The no-claim bonus that is earned under a health insurance plan will lapse if the policy is not renewed within the grace period. The facility of NCB is not offered by all health insurance policies in India and thus it is important to read the terms and conditions of the policy carefully while purchasing the policy and choose the plan that offers this facility. policyholders should also ascertain the percentage of the NCB and the rate at which the sum insured will increase with NCB before making a choice.

Final Words

The No Claim Bonus is a key feature to be scrutinized in health insurance plans before purchasing one. It helps families to stay covered even at times of escalating health care costs.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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