No Claim Bonus in Health Insurance: Here’s all you need to know about

by Joseph K. Clark

When you buy an insurance policy, you pay a premium every year against the coverage offered to the insurer. Within the policy year, if the need arises due to a financial loss, you raise a claim with the insurer, and the insurer compensates for the financial loss incurred. This is usually how an insurance policy works. Customers who are unhappy with their current insurer and wish to port their approach to a better insurer can even transfer the NCB to the new insurer.

What if you do not make any claim in a given policy year? Under two general insurance policies – Health and Motor insurance – if you do not claim within a policy year, the insurer awards you an incentive known as NCB or ‘No Claim Bonus. The NCB is offered to the customers yearly, provided they do not file any claim during the policy year. The No Claim Bonus is typically a reward the insurer pays the policyholder for not filing a lawsuit in a policy year. It is also a way to reward the policyholders for their loyalty. Sometimes, offering a No Claim Bonus is cheaper than paying for a claim that may run into lakhs.

Most importantly, the insurer’s bonus is cumulative, and it keeps increasing with every claim-free year. The proposed bonus in case of health insurance can be availed in the form of a discount on the subsequent policy premium, enhancement of the sum insured without any change in the policy premium, or other benefits like Gym, Spa, and Yoga subscriptions, or discount on wellness-related products. Most importantly, NCB applies to individual and family floater health insurance plans. If you have a personal health plan and do not make any claim throughout the policy year, the insurer rewards you with a no-claim bonus. Similarly, if you have a family floater plan and no one from the lives insured in the program makes any claim, the insurer here also rewards a no-claim bonus.

Health Insurance

The bonus offered through NCB is subject to each insurer’s terms and conditions. While some insurers may allow the enhancement of the sum insured, some may offer discounts on premiums or wellness products and services. While buying a health insurance plan, check the benefits offered under NCB. Earlier, most health policies allowed sum insured enhancement through no-claim bonus up to a limit, i.e., a maximum of 50%. However, health insurance plans are now available to enhance the sum insured by up to 200%. For instance, Mr. Rohit – 30 – buys a health insurance plan with Rs 5 lakh guaranteed for four consecutive years; he does not file any claim. Now, for every claim-free year, the sum insured by Rohit’s health insurance plan will increase by 50%, i.e., Rs 2.5 lakh. After four claim-free years, the sum insured by his health insurance plan will rise to Rs 15 lakh – an enhancement of 200%.

Another exciting part of Care Health Insurance’s Care Plus plan is that it comes with an inbuilt benefit called No-Claim Bonus Protection. His exclusive feature of a 200% increase in sum insured through the No-Claim Bonus is only available in Care Health Insurance’s Care Plus plan. Usually, if you have a health insurance plan and are in the policy year, the No-Claim Bon Bonus is wholly wiped out even if you file a claim as low as 10% of the sum insured. However, with the No-Claim Bonus Protection feature, the no-claim bonus remains unaffected, provided the claim amount is up to 25% of the total sum certified.

Customers who are unhappy with their current insurer and wish to port their policy to a better insurer can even transfer the NCB to the new insurer. However, to avail of NCB benefits, one must renew the health policy within the renewal date. Every insurer gives customers a maximum of 30 days grace period after the initial renewal date to continue their health policy. If the customer fails to renew the health policy even during the grace period, all the NCB benefits are lost and never be revived.

With medical inflation rising at a double-digit pace and the cost of hospitalization and other medical expenses touching the sky, it becomes imperative to have a health insurance plan in place for any unforeseen circumstances. So, stay fit and healthy, and make the most of your health insurance plan when need be. No-Claim Bonus is a great way to enhance your sum insured without paying anything extra from your pocket to beat medical inflation.

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