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.
Related Health Insurance Products
Cashless vs Reimbursement Claim
/health-insurance/cashless-vs-reimbursement-claim/
Claim Tax Deductions on Premium
/health-insurance/claim-tax-deductions-on-premium/
Health Insurance for Colon Cancer
/health-insurance/colon-cancer/
Common Insurance Exclusions
/health-insurance/common-health-insurance-exclusions/
Compare Health Insurance Plans
/health-insurance/compare-health-insurance-plans/
Star Comprehensive Insurance Policy
/health-insurance/comprehensive/
Health Insurance for Congenital Diseases
/health-insurance/congenital-diseases-in-india/
Co-pay in Health Insurance
/health-insurance/co-pay-in-health-insurance/
Co-payments In Health Insurance
/health-insurance/co-payment-in-health-insurance/
Co-payment And Deductible
/health-insurance/copay-vs-deductible/
Changing Job Corporate Insurance
/health-insurance/corporate-health-insurance-when-changing-jobs/
Not Having Health Insurance Risks
/health-insurance/costs-of-not-having-health-insurance-risks-and-consequences/
Tonsillitis Coverage Health Insurance
/health-insurance/coverage-tonsillitis-health-insurance-plan/
Cost of Surgery in Insurance
/health-insurance/cover-the-cost-of-surgery/
Critical Illness Insurance
/health-insurance/critical-illness-insurance/
Cumulative Bonus in Insurance
/health-insurance/cumulative-bonus-in-health-insurance/