How Does No-claim Bonus Increase Coverage?

Know More about No Claim Bonus: Maximise Your Benefits

A no-claim bonus works as a reward for maintaining a claim-free record during the policy year. If the insured person does not make any claim, the insurer adds a bonus at the time of renewal. This bonus increases the sum insured without increasing the premium.

How a No-claim Bonus Works in Health Insurance?

A No-Claim Bonus (NCB) offers rewards to the insured for not filing any claims during a policy year. Insurers give this by increasing the total amount of coverage, which is the sum insured by a set percentage at renewal, which is completely free of cost. As an alternative, some providers offer a discount on the next premium while keeping coverage the same.

What is the Maximum No-claim Bonus That a Policyholder Can Accumulate?

The maximum limit of a no-claim bonus varies between insurers. However, generally, the maximum limit ranges from 50% to 100% of your base coverage, as per the policy terms.

Does the No-claim Bonus Percentage Remain Over the Years?

No. It increases gradually. Suppose, if you receive 5% of no-claim bonus for the first claim-free year and the maximum you can receive is 50%, NCB will scale up to the maximum limit in the next 10 consecutive claim-free years.

Can a Minor Claim for an Outpatient Visit Cancel the Accumulated No-claim Bonus?

Yes. Even a single claim, irrespective of how small it is, can cancel your accumulated no-claim bonus. Your accumulated bonus will reset to zero. However, there are a few health plans that offer partial retention even after filing a claim. However, it depends on the policy terms. Thus, it is suggested to pay out of pocket for minor medical expenses rather than file a claim.

How to Protect the Accumulated No-claim Bonus if Someone Has to Make a Claim?

To protect the accumulated no-claim bonus, the policyholder can opt for a no-claim bonus protection add-on at the time of purchase or renewal. This add-on allows you to file a specific number of claims in a year, generally 1 to 3, without losing your hard-earned bonus.

What Happens After Getting the Maximum No-claim Bonus in a Health Insurance Policy?

Once you reach the maximum limit of no-claim bonus, often capped at 50% or 100% of your base sum insured, the accumulation stops. Your coverage or premium discount at that level remains the same, and the following claim-free years are not eligible for any no-claim bonus.

How Many Types of No-claim Bonus Are There?

There are primarily 2 types of no-claim bonus - cumulative bonus and premium discount. When the no-claim bonus is added to your sum insured without increasing your premium, it is known as the cumulative bonus.

Premium discount is another type of no-claim bonus. It mostly applies to car and motor insurance, where your safe driving skills are rewarded with a 2% to 5% reduction in the premium.

Will NCB Reset to Zero if Someone Fails to Renew a Health Insurance Policy?

Yes. Failing to renew the policy on time will result in the loss of accumulated NCB. However, most insurers offer a grace period by which one can renew the policy by paying the premium without any penalty. In this case, the policyholder’s NCB will remain preserved.