No Claim Bonus: Remunerative Partner in your Health Insurance

Jun 14, 2021 (0) comment , , , ,

It always feels extra special when you are rewarded. The benefit implied can help provide better facilities shortly. It also means health insurance where the insurer brand has been more active in making their customer happy and providing breakthrough deals in a policy period now and then. However, certain benefits remain unheard of or understood. Adding those while buying a policy is essential to enjoy additional perks while the need arises.

In this article, Secure Cover’s expert will elaborate on the NO Claim Bonus Feature in a Health Policy. In addition, the article will discuss how it can be essential for a policyholder to add it to a health plan.


What is a No Claim Bonus?

Suppose a policyholder has not claimed the sum insured in an entire policy year. In that case, the insurance company decides to reward the insured with a suitable benefit that enables the policyholder to claim more sum insured when the time arises to avail of a better healthcare facility.

No Claim Bonus feature in a health policy does that job. However, suppose a policyholder has not claimed the sum insured amount. In that case, the insurance company provides remunerative offers/benefits to the customer. For example, the insurance company could either add the extra cumulative amount in the total sum insured or decrease the premium rate by offering special discounts to the policyholder if he/she does not ask for a claim for an entire year.

Moreover, adding a No Bonus Claim while opting for a health insurance policy is essential. However, many people remain unaware that they could benefit from such and make their policy even more helpful by claiming a sum more than they agreed.


The Types in No Claim Bonus Feature

No Claim Bonus Feature has been divided into two kinds upon which the customer is provided with the benefit.

  1. Cumulative No claim Bonus Benefit.

Under the ‘Cumulative No Claim Bonus Benefit’ category, the policyholder who has not claimed the sum insured for an entire year would get the benefit to increase the total sum insured amount.  However, the rate of premium would remain the same.

For instance, If an insurance company has the policy to give a 5% bonus on every claim-free year, the policyholder has a sum insured of Rs. 10 Lakh. Therefore, the total sum insured would be 10.25 Lakhs. Hence, when the customer claims in a policy year, he could ask for a claim settlement of 10.25 Lakhs. The premium rate, however, would remain the same for the increased SI too.

2. Discount on Premium Benefit

In the case of Discount on Premium Benefit, the policyholder is given the benefit of reducing the premium by offering him/her a discount instead of increasing the SI by some percentage.

So if there is a guideline of reduction in premium rate by 5% for every claim-free year, then if the insured does not ask for claim settlement in a year, he/she would pay 5% less premium rate in the next year. It would not affect SI, as the policyholder has already been offered the No Claim Bonus.


Three Things to be aware of ‘No Claim Bonus Benefit’:

There are other technicalities about the ‘No Claim Bonus benefit.’ It is essential to keep them in knowledge so that there remains no confusion for future references.

  1. Most insurance companies lay the guideline of limiting the increase of cumulative bonuses for a claim-free year. It means the SI amount would be increased as part of the bonus only to a certain extent which is 50-100%. Hence, it would not be wise to ask for an increase of a percent that does not even come in that range. Therefore, the company would only increase the % they have mentioned in the policy guidelines.
  2. Irrespective of whether your policy is a family floater or Individual policy, the No Claim Bonus fall for both the categories of health policy, and the customer can benefit from it.
  3. Not all Insurance brands offer ‘No Claim Bonus benefit’ to the customers in their health policy. So it is always advisable to thoroughly read the terms & conditions before opting for the policy and know how much coverage can be increased if the ‘No Claim Bonus benefit’ exists in the policy.


Let’s Wrap Up!

The No Claim Benefit offers a good about of coverage to the customer. So a single claim-free year could provide many advantages in future emergencies making it more beneficial and easier to avail good healthcare infrastructure.

No Claim Bonus could be a good thing in both individuals as well as family floater plan. Hence, making it a good deal by most insurers.

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Disclaimer: The content of this blog is based on the personal research of the writer. Reader’s discretion is advised. Neither Secure Cover nor the writer will be held responsible for any wrongful interpretation of the content of this blog.

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