When you buy an insurance policy, you pay some premium every year to the insurer against the coverage offered. Within the policy year, if the need arises due to a financial loss, you raise a claim with the insurer and the insurer compensates for the financial loss incurred. This is usually how an insurance policy works.
Ever wondered what if you do not make any claim in a given policy year? Under two general insurance policies – Health and Motor insurance – if you do not make any claim within a policy year, the insurer awards you with an incentive known as NCB or ‘No Claim Bonus’. The NCB is offered to the customers every year provided they do not file any claim during the policy year. The No Claim Bonus is typically a reward that the insurer pays to the policyholder for not filing a claim in a policy year. It is also a way to reward the policyholders for their loyalty. Sometimes, offering a No Claim Bonus is much cheaper than paying out for a claim that may run into lakhs.
Most importantly, the bonus that the insurer offers is cumulative in nature and it keeps increasing with every claim-free year. The offered bonus in case of health insurance can be availed in the form of a discount on the subsequent policy premium, enhancement of sum insured without any change in the policy premium or other benefits like Gym, Spa, and Yoga subscriptions, or discount on wellness-related products. Most importantly, NCB is applicable to both individual as well as family floater health insurance plans. If you have an individual health plan and you do not make any claim throughout the policy year, the insurer rewards you with a no-claim bonus. Similarly, if you have a family floater plan and no one from the lives insured in the plan makes any claim, the insurer here also rewards a no-claim bonus.
The bonus offered through NCB is subject to each insurer’s terms and conditions. While some insurers may allow enhancement of sum insured, some may offer a discount on premium or discount on wellness products and services. While buying a health insurance plan, do make sure to check with the insurer the benefits offered under NCB. Earlier, most health policies allowed the enhancement of sum insured through no-claim bonus up to a limit i.e. a maximum of 50%. However, there are now health insurance plans available in the market that allow you to enhance the sum insured by up to 200%. Say, for instance, Mr. Rohit – 30 – buys a health insurance plan with Rs 5 lakh sum insured and for four consecutive years, he does not file any claim. Now, for every claim-free year, the sum insured of Rohit’s health insurance plan will increase by 50% i.e. Rs 2.5 lakh. After four claim-free years, the sum insured of his health insurance plan will increase to Rs 15 lakh – an enhancement of 200%.
For now, this exclusive feature of a 200% increase in sum insured through No-Claim Bonus is only available in Care Health Insurance’s Care Plus plan. Another exciting feature of Care Health Insurance’s Care Plus plan is that it comes within an inbuilt benefit called No-Claim Bonus Protection. Usually, if you have a health insurance plan and in the policy year, even if you file a claim as low as 10% of the sum insured, the No-Claim Bonus is completely wiped out. However, with the No-Claim Bonus Protection feature, the no-claim bonus remains unaffected provided the claim amount be up to 25% of the total sum insured.
Customers who are unhappy with their current insurer and wish to port their policy to a better insurer can even get the NCB transferred to the new insurer. However, to avail NCB benefits, one must make sure to renew the health policy within the renewal date. Every insurer gives a maximum of 30-days grace period after the initial renewal date to the customers to renew their health policy. If the customer fails to renew the health policy even during the grace period, all the NCB benefits are lost and cannot be ever revived.
With medical inflation rising at a double-digit pace and the cost of hospitalization and other medical expenses touching the sky, it becomes imperative to have a health insurance plan in place for any unforeseen circumstances. To beat medical inflation, No-Claim Bonus is a great way to enhance your sum insured without paying anything extra from your own pocket. So, stay fit and healthy, and make the most of your health insurance plan when need be.
(By Amit Chhabra, Head-Health Insurance, Policybazaar.com)