No Claim Bonus in Health
  • Types of No-Claim Bonus
  • Availability of No-Claim Bonus across Health Plans
  • Insights into Discounted Premiums with No-Claim Bonus
no claim bonus in health insurance
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No Claim Bonus in Health Insurance?

Hey there! Are you planning to buy a Health Insurance Policy? Well, that is a great decision. But wait a minute, have you thought about what will happen to your policy if you don't make any claim? Aren't you worried that the money you pay for your premium will simply go down the drain?

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But what if we tell you that you can still be rewarded for staying healthy, i.e. for not making any claims? Confused? Read along to find out more.

If you do not file for any claims during the year, the company provides you with perks, in the form of No Claim Bonus.

In today's time, most Health Insurance Companies are allowing their policyholders to enjoy the bonus amount that gets accumulated to the Sum Insured amount for every claim-free year. In simpler terms, if a policyholder does not make any claim within a policy year, the Insurer awards them with a benefit known as NCB or 'No Claim Bonus'.

Offering this benefit is a way through which Insurers encourage their consumers to stay healthy and file a claim only when it is necessary.

What is a No Claim Bonus?

No Claim Bonus in Health Insurance is a type of benefit offered by the insurance company to its policyholders for not making any claims in the policy period. It is calculated as a percentage, when these are added to the sum insured, the outcome will be an increased sum insured. The company gives it in the form of an incentive that encourages the client to maintain good health. A policyholder can save more money by accruing a larger No-Claim percentage the longer they go without filing any claims.

Types of No Claim Bonus in Health Insurance

Insurance companies mainly give the advantage of a No-Claim Bonus on their health insurances as:

  1. Cumulative Benefit meaning Higher Sum Insured

    Under this type, the coverage amount is increased for having a claim-free year, and the premium amount remains the same. Let us understand this through an example:

    For example, Mr Anand has Health insurance of Rs. 10 Lakh and his Insurance company provides a 5% 'No Claim Bonus' for every claim-free year. Take a look at the below table to get an idea of how much benefit Mr Anand can claim after 3 consecutive claim-free years.

    Year No Claim Bonus Health Coverage Amount
    1st Year --- Rs. 10 Lakh
    2nd Year Rs. 50,000 Rs. 10.50 Lakh
    3rd Year Rs. 50,000 Rs. 11 Lakh

    The above table showcases the increase of Health Coverage (Sum Insured) after every claim-free year. This means that in the 4th year if the need arises, Mr Anand can claim up to Rs 11,00,000, without paying any extra premiums.

  2. Discount on Premiums

    Under this type, a policyholder is eligible to avail of Discounts on Premiums for every claim-free year. The premium amount decreases by a specific percentage, though the coverage amount remains the same. Let us understand this through an example:

    For example, Mr Anand has Health insurance of Rs. 10 Lakh for which he pays the premium of Rs. 25000 per year. His Insurance company offers a 10% discount on premiums as no Claim Bonus for every claim-free year.

    Thus, if Mr Anand does not make any Health Insurance claim in the first year, then at the time of renewal he would have to pay only Rs. 22,500.

    Both types of No-Claim Bonus ensure that you get better financial security during a medical emergency.

How Does No Claim Bonus Work?

Following are the steps that describe how NCB in health insurance takes place. Read on to understand:

  • Renewal of the Policy: Whenever the policyholder renews a policy , the insurer will look at all the previous policy details, mainly claims history.
  • Claim-Free Year: If he/she has not raised any claim in the policy duration, that year is declared as the Claim-Free Year, so the customer is eligible for the No Claim Bonus.
  • No-Claim Bonus Calculation: The calculation of the No claim bonus will be based on the number of consecutive claim-free years. It is calculated as a percentage, it may vary from company to company and from plan to plan.
  • Discount on Premium: The health insurance no-claim bonus is applied as a sum that adds up to the Sum Insured. For Example, if your Sum Insured for the new policy is ₹20,000 and you have a 20% NCB. If you do not make any claim that year. 20% of ₹20,000 is 4000. So your new sum Insured will be ₹24,000. But you will only pay the premium of ₹20,000.
  • Transferability: If the policyholder decides to switch the policy the insurance provider will transfer the bonus to the new insurer. This means that the no-claim bonus can be carried forward.
  • Loss of No-Claim Bonus: When the policyholder makes a claim that means the benefits provided by the No-Claim Bonus will be lost for that year.

How is No Claim Bonus Beneficial?

No-Claim Bonuses serve many purposes. Here are a few of their benefits:

  • Cost Saving: No claim bonus in health insurance is a form of incentive offered by the insurance provider to the client for not filing any claims throughout the course of the policy year, which helps them save money. This benefit may take the shape of an additional amount on the Sum Insured.
  • Flexibility: Few insurance providers allow customers to take advantage of deductibles and other incentives like policy upgrades by using the NCB in health insurance. The policyholder can thus maximize their coverage in this way.
  • Long-Term Savings: If the policyholder manages to maintain consecutive claim-free years, the discount on the premium increases, encouraging substantial long-term savings.
  • The Incentive for Good Health: A health insurance no claim bonus is frequently offered by insurers as a reward for maintaining good health. This encourages the policyholder to take care of their health and stay in good physical condition.
  • Encourages Continuity: It encourages customers to renew their insurance contracts immediately after expiration, guaranteeing ongoing protection for you and your loved ones.
  • Enhanced Coverage: Health insurance firms give policyholders more benefits in exchange for no claims, which improves the coverage of the plan. Additionally, the business provides customer loyalty benefits which broaden the scope of the policy's coverage.

Is 'No Claim Bonus' available for both Individual & Family Floater Plans?

Under the Individual Plan, the cover is provided to one single individual. On the contrary, under Family Floater, the cover is provided to all the members included under the policy. The benefit of the No Claim Bonus is applicable under both the variants- Individual & Family Floater plans.

Is 'No Claim Bonus' available under all policies?

All Insurers provide the benefit of a 'No Claim Bonus'. However, it depends upon policy to a policy of each Insurance Company.

For example- Star Health has a wide array of plans, among which, Star Health Family Optima Care provides the Benefit of 'No Claim Bonus' & Star Health Senior Citizen Red Carpet does not offer 'No Claim Bonus'.

Therefore, it is advisable to thoroughly reach the policy brochure before investing in a plan.

Is there a fixed percentage on Sum Assured for 'No Claim Bonus'?

The percentage of 'No Claim Bonus' on Sum Assured depends upon plan to plan & Insurer to Insurer.

For instance- Different plans offered by Star Health Insurance offer different percentages of 'No Claim Bonus'.

Plan No Claim Bonus %
Star Mediclassic 5% each year
Young Star 20% each year
Star Comprehensive 50% each year

Therefore, it becomes important to carefully check the Terms & Conditions of the plan & weigh the features against your requirements.

Bottom Line

Leading a healthy lifestyle not only keeps you healthy but also offers lots of benefits, and one of them is the No claim Bonus. In today's time, when healthcare is on a continuous rise, having the benefit of a No Claim Bonus is nothing less than a blessing. So, stay fit, healthy and accumulate your Benefit of NCB.

No Claim Bonus in Health Insurance:FAQs

1. Will I lose my No Claim Bonus If I change my Insurer?

No, while porting your insurance, you can transfer your no-claim bonus provided that you renew the policy on time without any breaks.

2. Can the new policyholders avail the benefit of 'No Claim Bonus'?

To avail of the benefit of 'No Claim Bonus', the new policyholder has to complete one full claim-free year.

3. Can I get any No Claim add-on cover?

Yes, you can get an add-on cover. However, it depends upon Insurer to Insurer & policy to policy. For example- Care Insurance usually provides a 'No Claim Bonus' of 10% & if Super NCB Rider is added, the percentage can also get added up to 150% in a period of 5 years.

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Naval Goel

Reviewed By:Naval Goel

Naval Goel is the CEO & founder of Naval has an expertise in the insurance sector and has professional experience of more than a decade in the Industry and has worked in companies like AIG, New York doing valuation of insurance subsidiaries. He is also an Associate Member of the Indian Institute of Insurance, Pune. He has been authorized by IRDAI to act as a Principal Officer of Insurance Web Aggregator.