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Cumulative Bonus in Health Insurance

Cumulative bonus in health insurance increases your sum insured for each claim-free year without additional cost. It rewards healthy habits, boosts policy benefits, and encourages continued coverage with the same insurer.

  • 05 May 2025
  • 6 min read
  • 1262 views

To avail of health insurance coverage benefits, the policyholder typically pays a premium to the insurer. To get the best out of this contract, it is necessary to know the various features of a health insurance plan. One important feature of health insurance policies is the cumulative bonus. A cumulative bonus in health insurance incentivises policyholders to maintain a healthy lifestyle and avoid making claims during the policy term. By doing so, the policyholders reduce the risk of illnesses and help the insurance company to manage their costs effectively. It builds loyalty among policyholders and encourages them to renew their medical insurance plans with the same insurance company.

What is cumulative bonus in a mediclaim policy?

Let us start with understanding the cumulative bonus health insurance meaning. A cumulative bonus is a reward that health insurance companies offer to their policyholders for not making any claims during the tenure of the policy. It is an additional benefit that accumulates over the years, and the policyholder can avail of it at the time of renewal. The cumulative bonus is a percentage of the sum insured; it gets added to the policyholder’s sum insured without any additional cost.

How does cumulative bonus work in health insurance?

Cumulative Bonus works as an incentive for policyholders who maintain a claim-free record. Each year without a claim results in an increase in the sum insured by a predefined percentage, usually ranging from 5% to 50% per year, depending on the insurer. However, if a claim is made, the accumulated bonus may be reduced or reset as per policy terms.

Types of cumulative bonus in health insurance plans

Following are the different types of cumulative bonuses in a health insurance policy:

  1. No-Claim Bonus (NCB): The sum insured increases annually for each claim-free year, without a premium increase.
  2. Discount on Premium: Instead of increasing the sum insured, some insurers offer a discount on the renewal premium for every claim-free year.
  3. Hybrid Cumulative Bonus: Some policies provide a combination of an increased sum insured and a discount on the premium.

Benefits of cumulative bonus in health insurance policy

The key benefits of a cumulative bonus in health insurance are:

  1. Cost-Effectiveness: One of the primary benefits of the cumulative bonus in health insurance is that it increases the sum insured without any extra cost.
  2. Creates Good Financial Sense: The cumulative bonus health insurance provides an incentive for the policyholder to develop habits that promote a healthy lifestyle and avoid raising claims. By not making any claims, the policyholder can accumulate the bonus and use it to increase his/her coverage. This encourages the policyholder to take preventive measures and reduce the risk of illnesses. The cumulative bonus provides additional coverage to the policyholder, which is useful in case of medical emergencies and unexpected illnesses.
  3. Increases Savings: The cumulative bonus in health insurance is a cost-saving tool as well. This is because, with a cumulative bonus, policyholders can increase their sum insured without paying an additional premium. This helps reduce the financial burden of healthcare expenses and provides peace of mind to the policyholder.
  4. Builds Trust: In addition to the cost-benefit, the cumulative bonus helps build loyalty and encourages policyholders to renew their policies with the same insurer. Renewing the healthcare plan with the same insurance provider becomes way more beneficial because of the cumulative bonus in health insurance.

Conclusion

A cumulative bonus is a valuable feature in health insurance plans, offering policyholders additional financial benefits over time. While purchasing a health insurance plan for family, it is essential to consider the cumulative bonus benefit for long-term security and better healthcare coverage. Although the terms no-claim bonus and cumulative bonus in a Mediclaim policy get used interchangeably, they are not the same. And understanding the distinction can help policyholders make informed decisions about their medical insurance policies.


Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.

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