What is No-Claim Bonus in terms of Health Insurance?

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  | Published: 26 October 2021

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The increasing medical costs hint at the requirement for having sufficient health insurance coverage, which would save you when you are suffering from medical emergencies. Health Insurance plans will not just provide you with the coverage for your medical expenses, but also give you a reward in the form of spending a claim-free year in terms of NCB or No Claim Bonus facility.

In case you are applying for a Medical Insurance plan, you must consider this facility as an important factor because it helps you in getting an enhanced cover and additional security against healthcare expenses.

Now, let’s discuss more regarding No Claim Bonus and its benefits for the policyholders. 

What does no claim bonus mean in terms of health insurance?

A no claim bonus or NCB in a health insurance plan means the bonus cover added in the amount of sum assured offered by the insurance provider to the insured for each claim-free year. It refers to a reward, which is given to the policyholders when they maintain good health & don’t file the claim within the policy year. This is an amazing benefit; which policyholders can enjoy on the health plans.

The policyholders are entitled to receive cumulative benefits under NCB, wherein the amount of sum assured is increased by a certain percentage in each claim-free policy year. There is an increase of around 10% on the sum assured amount every year. This way, the amount of coverage gets accumulated & provides additional financial security for the policyholders. This increase comes with a maximum limit, which is 50% of the original amount of sum assured. 

Why is no claim bonus (NCB) beneficial for the policyholders?

No claim bonus is a feature of health insurance policy, which offers unique facilities to the policyholders including the following.

  1. The rise in sum assured- When there are big medical expenses, the existing health plan might prove insufficient, considering the constant side in the costs of healthcare. The feature of no claim bonus facility makes you eligible for the rise in the amount of sum assured, and that is a saving grace. You can go for a higher amount of sum assured for availing no claim bonus without any cost.
  2. NCB can be transferred- The no claim bonus is transferrable easily during portability. This means that the benefits, which are accrued by the policyholders will get transferred in case they opt for switching to their plan from one insurance provider to another.
  3. Financial safety- The increased coverage offers financial safety for the savings of a family in these times of rising costs of healthcare. Thus, it protects the family during tough situations such as a medical emergency.
  4. The maximum amount of coverage- This makes sure that the maximum coverage amount as your sum assured is not below the original amount even after making multiple claims. You will be eligible for making a claim on the basic and NCB amount.
  5. The incentive to stay healthy- NCB or no claim bonus encourages you to remain hale & healthy, and enjoy a year without any claims. 

How does NCB (no claim bonus) work?

The ultimate objective of health insurance policies is for providing financial comfort to a family because hospital bills are either settled or reimbursed via a cashless medical health plan claim benefit. At times, policyholders might not need to submit a claim request. The reason behind this can be that they managed to remain healthy, which saved them from bearing the hospital charges. Hence, in such a case, they are entitled to receive NCB under the health policy. 

What are the features of NCB or no claim bonus?

In case you are planning to purchase a health plan & wondering about all the factors that you should opt for the policy for, take into consideration the no-claim bonus coverage. The following are the features of NCB in health insurance.

  1. In case there is no claim in the 1st year, then the insurance provider provides 10% extra on the amount of sum assured.
  2. It is the incentive above the amount of sum assured, which will accumulate after each claim-free year.
  3. In the event of family floater policies, all the covered members under the health plan are entitled to the facility of no claim bonus. 

What happens to NCB in the case of health insurance if I do not renew my plan?

Each health plan has a definite term, generally for 1 year. Some of the plans are also available for a longer time period, say for around 2-3 years. In these cases, you have the option of paying a one-time premium for all this time & save themselves from the stress of renewing the insurance plan yearly.

But in the event where the policyholders are not able to renew the policy before the date of expiry, it will get lapsed.

In such a case, the policyholders won’t receive the facilities, which come with the renewal of the health plan. This means that the accumulated amount of coverage, which comes under NCB will not be available for the policyholders in case they don’t renew the insurance policy on time. 

How to make a claim for no claim bonus in a health plan?

It can be estimated that medical inflation is increasing at a rate of around 15% each year. The prices of healthcare services are increasing and it would be tough to make payment of the medical costs in the coming time. In this grim situation, NCB in a health insurance plan as cumulative facilities in the form of a higher amount of sum assured. 

When is the no claim bonus provided in a health plan?

NCB in a medical insurance policy is provided to the policyholders when they are planning to renew the insurance plan. The insurance providers also offer a no claim bonus within the tenure of the health plan. There could be a boost in the amount of sum assured as the bonus, which cumulatively rises in the value other than the usual NCB. The insurance companies that do not offer an NCB generally provide a rebate on the insurance premium for the renewal so that it could stand up with the competition.

The no-claim bonus in a health policy is generally applicable under the conditions mentioned below.

  1. In case the insured person makes a claim at a low value, the NCB is not foregone completely. A part of the total amount reserved for the bonus gets deducted, in the proportion to the size of the claim.
  2. Moreover, in case the insured person wants to shift their insurance providers, then the NCB, which has accumulated for the previous health plan could be transferred to the new health plan.
  3. In case the policyholders have a low record of the claim, they can enjoy a rebate on the health insurance premium amount, which needs to be paid with the particular extra feature in the plan. 

To Sum Up!

An NCB in the health plan is amongst the main features, which you must consider before buying a plan. The insurance plans, which offer considerable bonuses while only imposing minor penalties on claims at low costs could serve the purpose well and prove to be very conducive to your requirements.