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Cumulative Bonus in Health Insurance

When buying one of the best health insurance policies, people often research the claim process of the health insurance company beforehand. Needless to say, it is essential for every health insurance policy buyer to learn about the claim process of a particular insurer in advance so that there is no confusion or discomfort at the time of filing a claim. But, what if one does not make a claim in the policy period? What if the policyholder or their family remains fit and does not need any health insurance help? 

While health insurance companies receive multiple health insurance claims every year, there are also cases where no claims are filed. To appreciate and encourage good health and fitness among policyholders and reduce the number of claims filed, health insurance companies provide the benefit of cumulative bonus. 

What is the concept of cumulative bonus? Well, in simple words, cumulative bonus is a bonus that health insurance companies provide for being healthy throughout the year.

Let us uncover the cumulative bonus in depth and learn all about what it has to offer. 

When buying one of the best health insurance policies, people often research the claim process of the health insurance company beforehand. Needless to say, it is essential for every health insurance policy buyer to learn about the claim process of a particular insurer in advance so that there is no confusion or discomfort at the time of filing a claim. But, what if one does not make a claim in the policy period? What if the policyholder or their family remains fit and does not need any health insurance help? 

While health insurance companies receive multiple health insurance claims every year, there are also cases where no claims are filed. To appreciate and encourage good health and fitness among policyholders and reduce the number of claims filed, health insurance companies provide the benefit of cumulative bonus. 

What is the concept of cumulative bonus? Well, in simple words, cumulative bonus is a bonus that health insurance companies provide for being healthy throughout the year.

Let us uncover the cumulative bonus in depth and learn all about what it has to offer.  

What is Cumulative Bonus?

Cumulative Bonus is the bonus or rather a reward that a policyholder gets for remaining fit and not filing a claim. The benefit of cumulative bonus is granted in the year of renewal by making an increase in the sum insured amount, only up to a certain year for every claim-free year.

How does cumulative bonus work?

Learn that the percentage of the cumulative bonus offered is dependent on the health insurance provider as well as the plans offered. In general, the cumulative bonus percentage lies between 5% and 10%. So, if you do not require making a claim this year, at the time of policy renewal, this year, upon renewal, you could get your sum insured increased by 10%, subject to a maximum of 50%.

Let us understand the concept of cumulative bonus with the help of an example. So, let us assume that your health insurance company offers a 50% bonus for the increase in sum insured and you have invested in a health insurance policy worth Rs. 2 Lakh. In this case, note that your available sum insured in the following claim-free year will be Rs. 3 Lakh. Similarly, after two claim-free years, it will become Rs. 4 Lakh.

Things to Learn About Cumulative Bonus in Health Insurance

If this is your first time purchasing a health insurance policy with the cumulative bonus benefit, know that there are a few things that you must know about the term before your go ahead with your choice. So, learn that:

  • Cumulative bonus is one of the two types in which no claim bonus works in health insurance. In case of cumulative bonus, the coverage amount increases for every claim-free year at the same premium amount. The second type is discount in premium, in which for every claim-free year, the premium amount decreases by a certain percentage.
  • There is a limit of how much coverage a policyholder can increase through cumulative bonus. In general, this limit ranges between 50 to 100%. Note that the terms and conditions regarding the same may vary with health insurance companies.
  • Cumulative bonus benefit is available in both individual and floater health insurance policies. So, whether you have an individual policy or one covering your entire family under a single sum insured amount, rest assured you will be eligible for cumulative bonus.
  • Not every health insurance company provides the benefit of cumulative bonus. If even a health insurance company is providing cumulative bonus, there will be a set of terms and conditions related to the same. So, if you are buying a policy with cumulative bonus benefit, make sure you read the policy documents carefully to have a better understanding of the benefit offered.
  • The bonus is generally accumulated up to 10 years (maximum period).
  • A policyholder must renew their policy on time, i.e., before the expiry period to prevent losing out on all cumulative bonus benefits accrued during the policy period.
  • In case the claim overlaps with two health insurance policies, the policyholder can obtain the benefits of sum assured. Please note that the cumulative bonus is not zeroed down in a case like such.
  • You can either withdraw the cumulative bonus as a whole or after the deduction in premium.

What if I do make a claim within a year?

In case, you file a claim within a year’s span, your original sum insured will get reinstated. For instance, on making a claim, your cumulative bonus will be reduced by 10%, subject to a maximum of 50%, right in the way it was increasing every year owing to no claims.

Note that at the present time, the policy rules have become more flexible. In case, you make a low claim of Rs. 10,000 on the sum insured of Rs. 10 Lakh (very less amount claimed than the sum insured), your reward will go down by the same percentage of your cumulative bonus.

What will happen to my cumulative bonus if I decide to switch to another health insurer?

First and foremost, note that your cumulative bonus will remain valid even if you decide to change your health insurance provider. Nonetheless, note that while you may be able to transfer your cumulative bonus, the type of benefit you are offered by your new health insurance company will depend on the type of bonus (premium or sum based) it provides.

There are high chances that your new health insurance company may have a set of its own terms and conditions regarding the cumulative bonus aspect. So, it is advisable to consider the cumulative bonus feature before switching to a new insurer to avoid inconvenience of any kind in the end.

Can I get a 100% premium discount on my health insurance under the benefit of cumulative bonus?

It is significant for you to know that most of the health insurance companies come with a specific limit under the clause of cumulative bonus or no-claim. The maximum discount that you could get on the premium will depend upon the fixed percentage.

Can I opt for add-on covers for no-claim/cumulative bonus?

Certain health insurance companies offer add-ons for no-claim or cumulative bonus, thereby guaranteeing an increased percentage of the sum insured or premium discount.

What if my two health insurance policies get overlapped?

In the case of overlapping of two health insurance policies, you will be able to receive the benefit of the available sum insured without any hassle. However, do remember to renew your health insurance policy, in order to avoid expiration of cumulative bonus.

 

Also Read

7 Best Health Insurance Policies with No Claim Bonus aka Cumulative Bonus

Health Insurance Facts for Students Travelling Abroad to Study!

6 Health Insurance Companies That Provide NCB or Cumulative Bonus Benefit

Here is the list of 6 health insurance companies that provide the benefit of no claim bonus or cumulative bonus in their health insurance policies:

Health Insurance Companies Policy Offering NCB or Cumulative Bonus Benefit
HDFC ERGO

Easy Health & my: health Suraksha

Care Health Insurance Joy
ManipalCigna ProHealth
Bajaj Allianz
Health Guard
Max Bupa Health Companion
Aditya Birla Activ Health Enhanced

Conclusion

Now that you are aware of the concept of cumulative bonus, make sure you don’t leave it ignored.

If willing to gain more knowledge on cumulative bonus or no claim bonus? Initiate contact at 18001205698 to talk to our experts and clarify your doubts.

If interested in finding health insurance policies with cumulative bonus feature, feel free to explore our website.

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