Health insurance is a significant aspect of financial planning, providing coverage for medical expenses and safeguarding against unforeseen health-related emergencies. v One such feature is the No Claim Bonus (NCB) in health insurance. Many health insurance policies offer this unique feature to reward policyholders for staying healthy and not making any claims during a policy year.
In this post, we will explore what the no claim bonus in health insurance is, how it works, and the benefits it provides.
Explaining No Claim Bonus
No claim bonus in health insurance is typically a discount or additional benefit provided by health insurance companies to policyholders who do not make any claims during a policy year. It is a form of appreciation or reward for maintaining good health and not utilising insurance coverage for medical expenses. NCB is typically offered as a percentage of the premium amount and added to the sum insured, resulting in an increased coverage amount without an additional premium cost. Sometimes NCB is also awarded as a discount in the premium amount.
How Does No Claim Bonus Work?
Health insurance no claim bonus works on the principle of rewarding policyholders for not filing any claims during the tenure of a policy. If a policyholder does not make any claim during the policy’s term, the insurer offers a certain percentage of the sum insured as an NCB at the time of policy renewal. Some insurance providers offer the NCB as a discount on the premium instead of an increase in coverage. The percentage of NCB may vary from one insurance company to another and can range from 5% to 50% and sometimes even more, depending on the policy’s terms and conditions.
Note that the No Claim Bonus is not cumulative and does not carry forward if not utilised during the policy period. Instead, it goes on increasing as a percentage amount every year till 5 continuous years of no claim. Once you make a claim for your health insurance coverage, the No Claim Bonus gets exhausted.
However, some insurers offer add-ons called “No Claim Bonus Protection Cover”, which allows policyholders to retain their health insurance no claim bonus even if they make a claim during the policy period. Policyholders can buy this add-on by paying a nominal additional premium.
Benefits of No Claim Bonus in Health Insurance
The major benefits of no claim bonus in health insurance are listed below.
• Increased Coverage:
One of the primary benefits of the NCB in health insurance is the increased coverage amount without any additional premium cost.
• Incentives for Healthy Lifestyle:
No Claim Bonus acts as an incentive for policyholders to maintain a healthy lifestyle and avoid making claims for minor health issues.
• Cost Savings:
No Claim Bonus can result in cost savings as policyholders can continue getting the same coverage at a discounted cost. Policyholders who do not make any claims can avail of the benefits of health insurance with no claim bonus year after year, resulting in substantial savings on the overall premium cost.
Insurers offer a No Claim Bonus to policyholders for not raising a claim during a policy year as an increase in coverage or sum insured or a discount on the premium. The no claim bonus feature in medical insurance encourages policyholders to adopt a healthy lifestyle and go for regular preventive check-ups.