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No Claim Bonus in Health Insurance

Features and Benefits of NCB in Health Insurance


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The rising medical inflation hints at the need for having adequate health insurance cover that would save you in times of medical emergencies. Health insurance policies will not only cover you for the medical expenses you incur but also reward you for spending a claim-free year under the No Claim Bonus (NCB) feature. If you are opting for a health policy, you should consider this feature as a key factor, as it helps you get enhanced coverage and additional cushion to protect from healthcare expenses.

Let us understand more about No Claim Bonus and how it benefits a policyholder.  

Table of Content:

What is No Claim Bonus in Health Insurance?

A No Claim Bonus (NCB) in health insurance refers to the bonus coverage added in the sum assured provided by the insurer to the insured for every claim-free policy year. It is a reward we give to the policyholders for maintaining good health and do not file the claim during the policy year. It is a fantastic benefit that policyholders can enjoy on their health insurance policies.

The policyholder is entitled to cumulative benefit under no-claim bonus, wherein the sum insured amount increases by a specified percentage in every claim-free year. There is a yearly increase of 10% to the sum insured. This way, the coverage amount gets accumulated and offers additional financial cushion for the policyholder. There is a maximum limit to the increase, that is, 50% of the original sum insured.

Here is why No Claim Bonus is Beneficial to Policyholders

No Claim Bonus is a feature of health insurance plans that offers unique benefits to the policyholder that include:

  • Increase in Sum Insured: When there are huge medical expenses, your existing health policy may prove inadequate, given the steady rise in healthcare costs. The no claim bonus feature makes the policyholder eligible for increase in sum insured, which is a saving grace. One can opt for a higher sum insured to avail NCB free of cost. 
  • NCB is Transferable: No Claim Bonus can be transferred easily during the portability. That is, the benefits accrued by the policyholders will be transferred if they opt to switch to their policy from one insurer to another.
  • Financial Cushion: The increased coverage provide a financial cushion for a family’s savings in times of rising healthcare costs. It thus protects a family during critical situations like a medical emergency. 
  • Maximum Coverage: It ensures maximum coverage as the sum insured does not go below the original value even after multiple claims. The policyholder is eligible for making claim on the basic and NCB amount. 
  • Incentive for Staying Healthy: No Claim Bonus encourages policyholders to remain hale and hearty, and enjoy claim-free year

How does No Claim Bonus Work (NCB)?

The ultimate aim of medical insurance plans is to provide financial comfort to a family as hospital bills are either reimbursed or settled through a cashless medical insurance claim facility. Sometimes, policyholders may not need to make a claim. The reason could be that they managed to stay healthy that saved them from hospital expenses. So, in this case, they are entitled to a no-claim bonus under their health plan.

Let us take an example:

Vijay purchased a health policy for his family with a total coverage amount of Rs 5 Lakh. The insurer provides a no claim bonus with an increase in sum insured every year at a rate of 10% with a maximum limit of 50%.

Now, let us take a look at how much coverage he would be eligible for at the end of every claim-free year.

  • After the first claim-free year, the sum insured is 5 Lakhs 50 Thousand
  • After the second claim-free year, the sum insured is around Rs 6 Lakhs

In case, Vijay raises a claim in the third year, his available sum insured will be taken into consideration.

Features of No Claim Bonus (NCB)

If you are planning to buy a health insurance plan and wondering on what factors you should take the policy, consider no claim bonus cover. You can read the below features:

  • It is an incentive above the sum insured that will accumulate after every claim-free year.
  • If there is no claim in the first year, then the insurer offers 10% extra on the sum insured.
  • In the case of family floater plans, all the members covered under the policy are entitled to no claim bonus.

>> Also Read: Health Insurance Claim Settlement Ratio

No Claim Bonus in Care Health Insurance (Formerly Religare Health Insurance)

Care Health Insurance (Formerly Religare Health Insurance) offers bonuses to the policyholders for spending a year without making any claim on their insurance policy. The no-claim bonus (NCB) feature is an advantage as it entitles them to make huge savings. The NCB in health insurance is available as cumulative bonus amount which gets accumulated to the sum insured every year; the sum insured gets increased by an additional 10% up to the maximum limit of 50% in five successive years.

This way, the policyholders can enjoy additional coverage that will help them face medical emergencies and get quality treatment without any worry. Medical inflation is at a rate of 15% every year. As the healthcare costs in India are rising steadily, the NCB offered by Care Health Insurance (Formerly Religare Health Insurance) proves to be highly beneficial.

No claim bonus in health insurance is among the useful features of medical insurance policies, which should be considered by policy buyers since it helps in saving on medical expenditures.

FAQs on Health Insurance No Claim Bonus

What Happens to No Claim Bonus in Health Insurance if I Don’t Renew My Policy?

Every health insurance policy has a definite tenure, usually for one year. Some plans are also available for a longer tenure, say for two or three years. In such cases, the policyholders have the option to pay a one-time premium for all these years and save themselves from the hassles of renewing the policy annually..

However, in the case where a policyholder fails to renew the policy before the expiry date, it will lapse.

In such an event, the policyholder will not receive the benefits that come with health policy renewal. That is, the accumulated coverage amount that comes under no-claim bonus would not be available to the policyholders if they do not renew their policies on time.

What Happens to Health Insurance No Claim Bonus if I Switch from an Individual to a Family Floater Plan?

One of the advantages policyholders have under health insurance plans is the option to change their plan from individual to a family floater health insurance. By changing an individual policy to a family floater, the benefits accumulated in the previous health policy can be made available to other members of the family under the new policy. The benefits would also include the no-claim bonus feature given by the insurer. However, the sum insured amount or the percentage can vary, and it would depend on whether the plan was changed from individual to family floater or vice versa. Moreover, an increase in sum insured is also another vital factor taken into account.

Is the No Claim Bonus Transferable?

Yes, the no-claim bonus is easily transferable. A policyholder can transfer the no-claim bonus benefits accumulated from a particular health insurance plan to a new health insurance plan from another insurance company. It can be transferred at the time of the portability of a health insurance policy or policy renewal.

How to Claim No Claim Bonus in Health Insurance?

It is estimated that medical inflation is rising at a rate of 15% every year. The costs of healthcare services are skyrocketing, and it will be difficult to bear the medical costs in the coming future. In such a grim situation, no claim bonus in health insurance can be beneficial, and you can avail no claim bonus as cumulative benefits in the form of higher sum insured.

For Example:

Assume that you have health insurance with the sum insured of Rs.5 lakh. You didn’t claim in the first year. In that case, your insurer offers you 10% of cumulative of no claim bonus with a maximum of 50%. So, the total sum insured after every claim-free year is:

  • For 1st Claim Free Year, the Sum Insured is Rs.550000
  • For 2nd Claim Free Year, the Sum Insured is around Rs.600000 and so on.

When is No Claim Bonus Offered in Health Insurance?

No claim bonus in health insurance is offered to the policyholder when they are going to renew the health insurance policy. Insurers also offer no claim bonus during the term of the health insurance policy. There can be a boost in the sum insured in the form of a bonus that cumulatively increases in value instead of the usual no claim bonus. Those companies that don’t offer a no claim bonus typically offer a rebate on the premium for renewal so that it can stand with the competition. Care Health Insurance (Formerly Religare Health Insurance) offers a no claim bonus of 10% to the sum insured, up to a maximum no claim bonus limit of 50% in 5 successive years.

No Claim Bonus in health insurance is usually applied under the following conditions:

  • If the insured individual makes a low-value claim, the No Claim Bonus is not forgone entirely. A fraction of the total sum reserved for the bonus is deducted, in proportion to the claim size.
  • Moreover, should the insured want to shift health insurance policy providers, then the No Claim Bonus that has accumulated for the previous health insurance policy can be transferred to the new health insurance policy.
  • If the policyholder has a low claim record, he can get a rebate on the health insurance premium that needed to be paid, along with certain extra features in the policy.

In summary, a no claim bonus in health insurance is amongst the key features that you should consider before purchasing a policy. Insurance plans that offer substantial bonuses while imposing only minor penalties for low-cost claims can serve their purpose well and prove to be highly conducive to your needs.

The current medical inflation is affecting the healthcare industry immensely. Care Health Insurance (Formerly Religare Health Insurance) offers no claim bonus as a benefit in its health insurance plans to enhance the coverage and sum insured. Hence, if you want to save your hard-earned money and get the most out of your health insurance policy, then stay fit and avail of no claim bonus by spending a claim-free year.

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