Know All About NCB or No Claim Bonus Under Health Insurance

Types of NCB or No Claim Bonus

Under the health insurance policies there are two types of NCB that policyholders can avail. They are:

Cumulative Bonus

This no claim bonus health insurance allows the policyholder to avail enhanced coverage amount or Sum Insured (SI) under the policy for a claim free year. So, in this case, the SI of the policy is increased up to a certain percentage, while the premium amount remains the same.

For example, if you have a health plan of INR 4 lakh sum insured and you earned an NCB of 5% offered by the insurer for each claim-free year. In that case, your sum insured will increase by 5% to INR 4.25 lakh with no addition in premium price. Similarly, it will keep increasing by 5% every year up to a particular percentage to allow you enhanced coverage. Though the premium amount remains unchanged.

Discount on Premium

This is another type of health insurance no-claim bonus where the premium amount while renewing your policy would be lowered by a certain percentage for each claim-free year. In this case, there won’t be any changes in the sum insured or coverage of your health plan.

Let’s take an example, imagine you have bought a health insurance plan with INR 4 lakh sum insured for a yearly premium of INR 10,000. Now, your insurer allows a 5% discount on renewal for each claim-free year. Hence, you can avail a 5% discount on the premium that is INR 500 for your next renewal and pay INR 9,500 as the premium. Similarly, you can lower the premium with more claim free years up to a certain maximum amount, while the SI remains the same.

Benefits of NCB under Health Insurance

There are various reasons which make an NCB beneficial for the policyholders:

• NCB allows the insured to avail better financial protection for the entire family during situations of medical emergencies
• NCB lowers the cost of policy renewal to receive better coverage at low premium
• NCB in health insurance boosts the policyholders to stay fit and healthy so that they can limit the raising of claims
• NCB is offered by insurance companies on both individual and family floater plans in India. However, there are many terms and conditions, which might vary depending on the insurer  

What is the maximum increase of Sum Insured under Cumulative Bonus?

NCB allows the policyholder to enjoy increased sum insured for a claim-free year under cumulative bonus. However, this increase can be enjoyed up to a certain limit only. Most health insurance companies allow the sum insured to be increased up to 50% - 100% of the original SI. Also, with the varying terms and conditions of the health insurance companies, these policies might vary too. So, it is important to go through the policy documents well to know the exact limit.

For example, if your insurer allows a maximum cumulative bonus of 50% under your policy and your original sum insured is INR 2 lakh. In that case, you can enjoy a maximum added coverage of INR 1 lakh for your health insurance under cumulative bonus. So, your SI can go to a maximum of INR 3 lakh and not beyond that despite the number of claim-free years you have.

Does NCB in India apply to Individual and Family Floater Health Insurance Plans?

NCB or No claim bonus is a discount offered to both individual and family floater health insurance plans. In case of the individual plan, the coverage is received by the policyholder. And in case of family floater policies, the coverage is spread across all the members of the family.

Hence, regardless of an Individual or a family-floater health insurance plan, the NCB benefit can be enjoyed if the policyholder does not raise a claim during a policy year.

Is NCB a part of all Health Insurance Plans in India?

No. it is not necessary that every health insurance policy in India will offer an NCB benefit. There are plans that do not provide NCB benefit but they might have their unique terms and conditions. Hence, it is necessary to go through the policy documents of your health plan thoroughly while buying a policy and to understand the NCB clause well.

Top Health Insurance Policies that Offer Better NCB or No-Claim Bonuses?

Here are some insurance companies offering better NCB benefits:

To Conclude

Looking at the high cost of healthcare treatment in the present times, it is really tough for the common man to get good medical treatment at reasonable expenses. Hence, NCB or No claim bonus is regarded as a lucrative way to increase policy coverage and safeguard the health of your loved ones. You can use the no claim bonus calculator to estimate the maximum NCB benefit that you can earn under your health insurance.