What is a no-claim bonus in health insurance?

Vote: 1

A no-claim bonus in health insurance is a financial discount or extra advantage offered by health insurance companies to their potential policyholders for maintaining good health throughout the year. In simple terms, it is a reward or appreciation provided by insurers to the policyholders who do not submit any claims in the policy year.


Here, we will discuss what a no-claim bonus is in health insurance with an example, its types, benefits and more.


No-claim bonus in health insurance: Explained with an example


No-claim bonus in health insurance refers to a benefit provided to policyholders by health insurance companies for each year without a claim. It motivates them to stay healthy during the policy time frame and not make any claims on their health insurance policy.


Let’s discuss the no-claim bonus with an example.


Suppose Ram has bought a health insurance policy with a base sum insured of Rs. 6,00,000 for Rs. 6,000. Now, if he does not raise any claim during the policy period, his health insurance company will provide a 20% discount on the premium. With this advantage, Ram will have to pay only Rs. 4,800 as the premium for the same sum insured. Besides that, they may increase Ram’s sum insured by 20% as a cumulative bonus. This will enhance his coverage to ₹7,20,000 for the next policy term.


Types of No-Claim Bonus


No claim bonus can be classified into two categories. The following are the types:



  1. Discount on Premium



  • Renewal premium decreases by a fixed percentage for every year without a claim.

  • Sum insured remains the same.



  1. Cumulative Bonus



  • The sum insured or coverage amount increases by a certain percentage for each claim-free policy year.

  • The premium amount will remain the same.


Benefits of No-Claim Bonus


Key benefits include:



  • Cost Reduction: With no claim bonus, you may get the same coverage at a discounted price, which eventually saves your money.

  • Encourages Healthy Behaviour:The NCB motivates the health insurance policyholders to stay fit and avoid filing any claims until a major emergency comes their way to get the benefit from this reward.

  • Provides Financial Protection:It guarantees enhanced financial security for the policyholders and their loved ones during unforeseen medical situations.


How can I check my no-claim bonus in health insurance?


You can check your no-claim bonus in health insurance on your policy document or by simply contacting the customer care of your insurance company.


Final Words


A no-claim bonus in health insurance encourages health insurance policyholders to maintain a healthy lifestyle and stay fit to spend the most claim-free years. If you do not make any claim for the entire year, the health insurance company will reward you with a no-claim bonus. Here, they may increase your sum insured or cut down your premium for the new year.