No Claims Bonus is Health Insurance: How It Works

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What is No Claims Bonus (NCB) in Health Insurance?

No Claim Bonus (NCB) rewards you for not filing claims during a policy year. If you stay claim-free, your base sum insured increases by 10% at each renewal, offering higher coverage over time.

This bonus can reach up to 50% of your base sum insured. Making a claim results in a 10% reduction in the bonus, but your coverage will never fall below the original sum insured. Each claim-free year boosts your NCB, giving you more financial protection without increasing your premium.

How Does No Claims Bonus Work?

No Claim Bonus (NCB) boosts your base sum insured when you go a policy year without filing a claim. It is added at renewal and enhances your coverage over time.

Step 1: Begin with your initial sum insured in the first policy year.
Step 2: If no claim is made during the policy year, your base sum insured will increase by 10% at renewal.
Step 3: For each additional claim-free year, an additional 10% is added to your base sum insured.
Step 4: This process continues until your total NCB reaches a maximum of 50% of the base sum insured.
Step 5: If a claim is filed in any policy year, the accumulated bonus decreases by 10% of the policy's expiring sum insured
Step 6: Even after this reduction, your total sum insured will not fall below the amount applicable in the first policy year.
Step 7: The rise in the sum insured with NCB does not raise the policy's sub-limits.

Example of NCB buildup:

Year 1: 10%

Year 2: 10%

Year 3: 10%

Year 4: 10%

Year 5: 10%

Therefore, after more than 5 years without claims, the NCB can increase by up to 50%.

Disclaimer: The illustration is indicative and meant for explanation purposes only. Actual NCB benefits, such as accumulation and reduction, may differ depending on the policy terms, conditions, and features.

A Quick Look at NCB Growth in Action

Each claim-free year boosts your policy's value. Here’s a simple example of how your No Claim Bonus grows and enhances your coverage over time.

Year	Base SI (₹ Lakh)	No Claim Bonus (₹ Lakh)	Total Coverage (₹ Lakh)	Claim Status
1	10	0	10	No Claim
2	10	1	11	No Claim
3	10	2	12	No Claim
4	10	3	13	No Claim
5	10	4	14	No Claim
6	10	5	15	No Claim (Max NCB reached)
7	10	4	14	Claim Made
8	10	3	13	Claim Made
9	10	2	12	No Claim
10	10	3	13	No Claim

Disclaimer: The illustration above is for reference only. NCB is determined solely by the base sum insured, and actual benefits may vary depending on the policy's terms and conditions

What is the No Claims Bonus Super in Health Insurance?

No Claim Bonus Super (NCB Super) is an optional add-on that boosts your No Claim Bonus by substantially expanding your coverage each claim-free year. If you don't make a claim, your sum insured increases by 50% at renewal, in addition to the standard NCB benefit.

This bonus can increase up to 100% of your original insured amount. If a claim is made, the bonus decreases by 50%, but your coverage will always stay at least the base sum insured.

NCB Super is automatically added at renewal, covering only the base sum insured and excluding recharge benefits.

No Claims Bonus vs No Claims Bonus Super: What’s the Difference?

Not all bonuses are the same. While both NCB and NCB Super reward good health, one accelerates your coverage growth more than the other.

Feature	No Claim Bonus (NCB)	No Claim Bonus Super (NCB Super)
Type	In-built benefit	Optional add-on cover
Increase per year	10% of the base sum insured	50% of the base sum insured
Maximum limit	up to 50% of base SI	Up to 100% of base SI
When applied	If no claim is made	If no claim is made
Impact of the claim	Reduced by 10%	Reduced by 50%
Minimum coverage	Never below base SI	Never below base SI
Applicability	Base benefits only	Base benefits only
Recharge benefits	Not included	Not included

Note: NCB and NCB Super apply only to the base sum insured and do not include recharge benefits. The increase in coverage does not affect sub-limits, and actual benefits may differ depending on policy terms and conditions.

How NCB and NCB Super Grow Your Coverage Together?

Here’s a quick example of how NCB and NCB Super work together to boost your coverage each year you go without making claims.

Year	NCB	NCB Super	Total Coverage
Year 1	-	-	₹10 Lakh
Year 2	₹1 Lakh	₹5 Lakh	₹16 Lakh
Year 3	₹1 Lakh	₹5 Lakh	₹22 Lakh
Year 4	₹1 Lakh	-	₹23 Lakh
Year 5	₹1 Lakh	-	₹24 Lakh
Year 6	₹1 Lakh	-	₹25 Lakh

Total Growth: ₹10Lakh→ ₹25Lakh (150% increase)

Disclaimer: This illustration assumes continuous claim-free years. In the event of a claim, NCB and NCB Super will be reduced in accordance with the policy terms. Actual benefits may vary.

Key Benefits of No Claims Bonus

No Claim Bonus rewards you for remaining claim-free by increasing your coverage and boosting the overall value of your health insurance over time.

Increased coverage at no extra cost: Each claim-free year boosts your sum insured, providing greater coverage.
Long-term financial savings: As your coverage expands, your out-of-pocket expenses during medical emergencies decrease, providing better financial security.
Protection against medical inflation: NCB helps gradually increase your coverage, helping you stay ahead of rising healthcare costs.
Encourages healthy living: Rewarded for claim-free years, NCB encourages you to live a healthy lifestyle and minimise unnecessary claims.
Enhanced policy value over time: NCB boosts your policy's value over time, gaining more benefits the longer you're claim-free.

Disclaimer: Stay healthy, skip the claims, and watch your coverage quietly level up.

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Important Terms & Conditions of NCB

Before relying on NCB benefits, ensure you understand the main conditions that affect how your bonus is earned and adjusted.

Maximum Limit: The total No Claim Bonus can reach 50% of the base sum insured.
Reduction on claim: If a claim occurs in any policy year, the accumulated bonus decreases by 10% of the expiring sum insured.
No Impact on sub-limits: Raising the sum insured under NCB does not affect the policy's sub-limits.
Applies only to the base sum insured: NCB is calculated only on the original sum insured and does not include recharge benefits.
Builds over time: NCB accumulates over successive claim-free years, up to the maximum limit.
Varies across plans: Some plans, like Care Advantage, offer a 10% increase up to 50%, while Care Classic offers a 25% increase up to 150%. It increases annually with no claims and drops after a claim, but coverage never drops below the original sum insured.

Who Should Consider Plans with NCB Benefits?

Not every policyholder benefits equally from NCB. It is especially beneficial for individuals seeking sustained coverage growth without experiencing premium increases.

Young and healthy individuals: Those with a lower risk of hospitalisation can gradually attain higher coverage without additional costs. NCB promotes a healthy lifestyle and builds a solid financial safety net for the future.
Individuals concerned about medical inflation: As healthcare costs rise, NCB assists your coverage in expanding each year—making sure you remain sufficiently protected without raising your premium.
Families (family floater plans): If no family member files a claim, the whole family gains from expanded coverage. This approach is an economical way to gradually enhance protection.
Budget-conscious policyholders: NCB adds value to your policy by boosting coverage without raising premiums, helping you manage long-term healthcare expenses effectively.
Long-term planners: Those who intend to maintain insurance coverage for several years can increase their coverage significantly over time, enhancing the value and future readiness of their policy.

How to Make the Most of Your No Claims Bonus?

Your No Claims Bonus can greatly enhance your coverage without raising your premium—if managed carefully. Here’s how to make the most of it:

Stay Claim-Free: Each claim-free year can raise your sum insured by 10%, up to a maximum of 50% over five years. For instance, a ₹10 lakh policy could grow to ₹15 lakh at no extra charge.

Avoid Small Claims: Pay small medical costs out of pocket to keep your claim-free status intact and let your NCB grow.

Renew on Time: Always renew your policy during the grace period, which is usually 90 days. Failing to do so may result in you losing your accumulated bonus.

Understand Your Policy: Verify if your NCB is a cumulative bonus (extra coverage) or a premium discount, as each provides different value.

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How to Apply for or Avail a No Claim Bonus?

A No Claims Bonus rewards you for staying claim-free—but you need to ensure you actually receive it. Here’s how:

Stay Claim-Free: The initial step is straightforward, i.e. avoid filing claims throughout the policy year. This allows you to qualify for the NCB upon renewal.
Check at Renewal: NCB is typically applied automatically upon policy renewal, but it's important to review your renewal notice carefully.
Inform Your Insurer: When renewing, confirm with your insurer that your NCB has been applied—don’t assume it’s automatically included.
Verify Policy Documents: Verify whether your NCB is shown as the increased sum insured and a discounted premium.

Pro tip: Don’t just renew—review. Your NCB deserves a second look.

Common Mistakes to Avoid When Using NCB

Your NCB can significantly enhance your health coverage, but a few mistakes could ruin it. Here’s what you need to watch for:

Filing claims for small expenses: Even small claims can reset your NCB. If feasible, settle minor medical bills yourself to maintain your bonus growth.
Missing renewal deadlines: Allowing your policy to lapse may result in the cancellation of all your accumulated benefits. Make sure to renew promptly to preserve your NCB.
Missed opportunity: Many policyholders underestimate the benefits of NCB Super, which can enhance coverage at no additional cost. You could overlook the advantages of higher sum insured benefits.
Overlooking the NCB Limit: NCB has a limit; check your policy’s maximum cap to know when your bonus will stop increasing.
Not Understanding Family Floater Rules: In a family health insurance plan, one member’s claim affects everyone’s NCB—be mindful of shared impact.

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FAQs

Q. What is No Claims Bonus (NCB) in health insurance?

NCB rewards claim-free years by providing higher coverage options upon renewal.

Q. What happens to my NCB if I make a claim?

Your accumulated NCB may be reduced or reset, depending on your policy terms.

Q. How can I maximise my No Claims Bonus over time?

Remain claim-free, steer clear of small claims, and renew your policy punctually. You may also include the advantages of NCB Super.

Q. Does NCB get affected in a family floater policy?

Yes, a claim from any member can affect the NCB of the entire policy.

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Disclaimer:^Information above is just for reference. Kindly read T & C of policy thoroughly, Do refer IRDAI guidelines for tax exemption conditions.

~Tax benefit is subject to changes in tax laws. Standard T&C Apply

^^Number of Cashless Healthcare Providers as of Dec 2025

**Number of Claims Settled as of Dec 2025

*The Premium Payback benefit refunds the first-year base premium after each block of 5 consecutive claim-free years

No Claim Bonus in Health Insurance

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