What is No Claim Bonus In Health Insurance?

Commonly known as NCB, the No Claim Bonus in health insurance is a reward offered to policyholders who have not filed any claims during their policy year. The reward may be an increase in the sum insured without an increase in the premium or a discount at renewal.

Thus, NCBs can be an effective tool for individuals who want to lower their premiums or opt for higher coverage.

Keep reading to learn about the no claim bonus in health insurance and the associated benefits.

What are the Different Types of No Claim Bonus in Health Insurance?

No claim bonus in health insurance is categorised under two types:

1. Cumulative Bonus

In a cumulative bonus, the insured amount increases by a fixed percentage, as decided at the time of purchase, if the policyholder has a claim-free year. This does not result in an increase in premium.

2. Discount on Premium

Under the premium discount, the premium amount is reduced by a fixed percentage for each claim-free year. The discounts can be redeemed each year or accumulated for a larger discount in subsequent years.

How does a No Claim Bonus Work in Health Insurance Plans?

When an individual buys a policy from an insurer, the company covers a fixed sum insured for a specified duration. If the insured does not make a claim during the policy year, the insurer rewards the policyholder by either increasing the sum insured by a predefined limit or reducing the premium.

For example, you opt for a policy with a sum insured of ₹5,00,000. If there are no claims made during the policy year, the insurer rewards you with a 10% NCB. Then, the insured sum for the next year becomes ₹5,50,000 with no additional cost, and this accumulation continues till the amount reaches the maximum limit.

What are the Benefits of a No Claim Bonus Insurance?

There are certain benefits of availing the no-claim bonus that add value to the health insurance policy. Check them out in the following section:

• Higher coverage at the same premium cost.


• Acts as an incentive for a healthy life and encourages preventive care.


• Helps policy buyers save in the long run and reduce renewal costs.


• Allows the insured to manage future high medical expenses.


• A no-claim bonus is transferable and can be accumulated for bigger discounts.

What’s more, no claim bonuses are available for individual as well as family floater plans that cover the entire family under a single insured amount. Hence, the NCBs can be availed regardless of the type of health insurance.