How No-Claim Bonus Benefits Health Insurance Holders ?
Understanding No-Claim Bonus in Health Insurance
If you do not make any claims during the first year of your health insurance policy, you qualify for a no-claim bonus. This bonus can be given as improved coverage or a reduced premium. The second option is more common among top health insurance providers in India, such as Star Health Insurance.
Understanding How the No-Claim Bonus Works
A no-claim bonus is credited by an insurance company to both individual and family floater health insurance policyholders.
Here is a quick example to represent how the insured sum increases following every single claim-free year.
Suppose Mr Mukesh has bought a health insurance policy of Rs. 5 Lakhs. Let's say his policy provides an NCB or no-claim bonus of 5% for every claim-free year, and this can go up to 25%. In this case, the year limit of coverage will somehow look like this:
Claim-free Years | Insured Sum (in ₹) | No-Claim Bonus (in ₹) | Coverage Limit (in ₹) |
After 1 year | 5,00,000 | 25,000 (5%) | 5,25,000 |
After 2 years | 5,00,000 | 50,000 (10%) | 5,50,000 |
After 3 years | 5,00,000 | 75,000 (15%) | 5,75,000 |
After 4 years | 5,00,000 | 1,00,000 (20%) | 6,00,000 |
After 5 years | 5,00,000 | 1,25,000 (25%) | 6,25,000 |
Note: The table shared above is strictly for explanation purposes. In reality, the no-claim bonus calculation can depend on various other factors and generally varies from one policy to another. For instance, some health insurers may reduce your no-claim bonus level next year if you make a single claim after several years of no claims, depending on how you utilise the bonus amount.
How is a No-Claim Bonus Helpful?
The following are a few key reasons that make the no-claim bonus a vital inclusion for health insurance owners:
- NCB empowers you and your family to avail yourself of superior medical coverage in times of a medical emergency.
- It lowers the cost of policy renewals by reducing the adjusted premium.
- The primary benefit of a no-claim bonus is that it encourages individuals to push for a healthier lifestyle and file claims when those are absolutely essential.
- Most reputed health insurers across India, like Star Health, offer no-claim bonus or cumulative bonus benefits to their customers. However, the conditions for qualifying are different for each health insurance company.
Therefore, you must cautiously check the terms and conditions before finalising a particular health insurance policy.
Also Read:
→ How Often Can You Claim Health Insurance
→ How OPD Works in Health Insurance Policies
→ How Soon After Taking Out Health Insurance Can I Claim
FAQs
The maximum no-claim bonus, often referred to as a cumulative bonus, is typically capped at 100% of the base sum insured. While the exact percentage earned per year can differ by plan. Always check your specific plan document, as benefits are subject to policy terms and conditions.
For many health plans, filing a claim, even a partial one, can impact your cumulative bonus. While older or traditional plans might reset the bonus to zero upon any claim, several plans are designed to reduce the bonus only by the amount utilised for the claim.
The no-claim bonus and restoration benefit function as different layers of coverage that work in sequence. The NCB increases your sum insured for claim-free policy years, while the restoration benefit automatically recharges your coverage if it is exhausted. Generally, claims are paid first from your standard sum insured, then from your accumulated NCB, and finally by the restored amount.
No, standard add-on riders do not negatively impact your No Claim Bonus.
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This FAQ page contains information for general purpose only and has no medical or legal advice. For any personalized advice, do refer company's policy documents or consult a licensed health insurance agent. T & C apply. For further detailed information or inquiries, feel free to reach out via email at marketing.d2c@starhealth.in
