One of the major benefits that the policyholder enjoys for having a claim-free year is the No Claim Bonus. It is a sort of reward that the insurance companies provide to the policyholders for not placing any claims on a health insurance policy in a particular year. It is the bonus money added to the sum insured for every year which is claim-free.
There are certain important factors that need to be considered in the case of the No Claim Bonus. Let us take a closer look at them.
1.Types of No Claim Bonus in Health Insurance
There are two types of No Claim Bonus namely a) Cumulative Bonus b) Discount in Premium.
a) Cumulative Bonus
In the case of the Cumulative Bonus option, the policyholder can opt for an added amount of sum insured, for no added cost in lieu of a claim-free year. This is an advantage that the policyholders enjoy in this time of increased medical expenses.
However, there is a limit to the increase of insured amount in such cases. In most cases, the increased amount can range from 50 to 100% of the total sum insured. This is the most prevalent concept in most health insurance companies.
b) Discount in Premium
Some health insurance companies offer a discount on premium for every claim-free year but the coverage remains the same. The premium amount is decreased by a certain percentage for every year in which it is claim-free while the coverage amount remains unchanged. However, this concept is not so prevalent now.
2. No Claim Bonus is Portable
The benefits accumulated by the policyholder can be transferred easily in case the policyholder wishes to switch their policy from one insurer to the other. The benefits can easily be carried forward.
3. No Claim Bonus Applies to Both Individual and Family Floater Health Policies
An individual enjoys the benefits of a No Claim Bonus in lieu of a claim-free year from his/her individual health policy. In the same way, in the case of a family floater health insurance plan, if a member who is covered under the health plan places no claim in a whole year, then they are also eligible for no claim bonus in the next year.
4. All Health Policies do not offer No Claim Bonus
It is extremely important to read the fine print of the policy document as all health insurance companies do not offer No Claim Bonus. Also, even the ones who do offer No Claim Bonus, have a lot of terms and conditions guiding it. The terms and conditions may include the percentage of No Claim Bonus, the amount by which the sum insured can be increased, etc.
5. The Fate of No Claim Bonus If the Health Insurance Policy is not Renewed
Each Health Insurance Policy needs to be renewed after a period of 1 year. In some cases, it might be for a period of 2 or 3 years depending on the term of the policy and the amount of premium paid. In case the policyholder does not renew the policy by paying the premium amount within the stipulated time, the policy lapses. Once the policy lapses, No Claim Bonus is not available for the policy, that is, the upgraded coverage amount is not applicable under No Claim Bonus for that policy.
6. Other Benefits with NCB
There could be other additional benefits with No-Claim Bonus as a reward for not claiming the entire policy year like discount vouchers, health benefits like gym memberships, annual health check-ups, etc.
How You Can Claim No Claim Bonus of Your Health Insurance?
The cost of medical expenses is skyrocketing every year and it has been estimated that medical inflation is at a rate of 15% per annum. Hence, it is going to be increasingly difficult to keep up with the growing cost of medical treatments. In such cases, the accumulation of the No Claim Bonus for your Health Insurance Policy comes to your aid. The cumulative bonus gives you the benefits of an increased sum insured without investing any further amount of money by way of premium.
Let us take a look at an example:
If you have a health insurance plan with a sum insured of INR 5,00,000 and you are offered a 10% of cumulative of no claim bonus, by your insurer, with a maximum limit of 50%, then after each claim-free year your sum insured will be:
After the first claim-free year, the sum insured of INR 5,00,000 goes up to INR 5,50,000.After the second claim-free year, the sum insured goes up to INR 6,00,000.So, if there is any claim at the end of the 2nd year, you can avail upto INR 6,00,000 as your health insurance claim, even though your sum insured is only INR 5,00,000. However, in the subsequent year, there will be no NCB as you have raised a claim this year.
Conditions Under Which Deductions or Restrictions are Applied on NO Claim Bonus
- If you make a low-value claim, in a particular year, The No Claim Bonus is not forfeited totally. A part of the sum reserved to be given as a bonus is deducted proportionately to the claim size.
- If you hold a record of placing low claims, then you are liable to get a rebate on the Health insurance premium that you were supposed to pay. A few additional benefits may also be added to your existing policy.
Summary
The No Claim Bonus is a feature in the Health Insurance Policies that enables you to make huge savings. At the same time, NCB also encourages you to place your health insurance claims only when it is necessary. Hence it is one of the most important features of a Health Insurance Policy that you should consider while purchasing a Health Plan. Policies that offer a substantial No Claim Bonus in order to give you enhanced health coverage and total sum insured are the ones to gun for. In order to avail the most of your Health Insurance Policies, you should ensure that you stay hale and hearty to keep enjoying the benefits of your No Claim Bonus.
