No claim bonus (NCB) in health insurance is a reward given by insurers for not raising a claim. It is a type of incentive that the insurance provider offer for staying healthy.
The health insurance provider will offer you a no-claim bonus by increasing your sum insured.
Types of NCB in Health Insurance
If the insured does not raise a health claim, then the insurance company will give him an NCB benefit by increasing the sum insured while keeping his premium amount the same. If he makes no claim throughout the policy period, his claim will increase year after year (subject to certain limits set by the company), for every claim-free year. This progressive increase in the sum assured is known as a cumulative bonus.
Suppose, you have bought a health insurance plan with a sum assured of Rs 15 lakh, and an annual premium of Rs 15,000. If the insurer offers a cumulative bonus of 10% and you did not raise a claim, then your sum assured for the next year will be increased to Rs. 16.5 lakh and the premium will remain the same i.e., Rs. 15,000. However, this increase is limited to a sum assured which is lesser than the sum assured purchased.
Discount on Premium
Similar to NCB in motor insurance, the health insurance company offers NCB in the form of a discount on premium. If an insured has a claim-free year, the insurance company will lower his premium (to a certain limit) on the policy when he renews his policy next year. The sum assured will not be affected by the reduced premium.
So, taking the above example, if the insurer offers a 10% discount on premium as NCB, then your premium amount for the next year will be reduced to Rs. 13,500 and the sum assured will remain the same i.e., Rs. 15 lakh.
However, most health insurance companies offer an additional sum assured only.
Facts About NCB in Health Insurance
- NCB is considered evidence of staying healthy.
- NCB is given only when the policyholder has not raised a health claim during the previous policy period.
- It leads to an increase in the sum insured or a discount on premium.
- Generally, insurers decide themselves about the type of NCB benefit they’ll be offering to the policyholders.
- NCB can be transferred to another insurance company. If you want to port your health insurance policy to another insurer, your no-claim bonus will still be active.
- Insurance companies set a limit on the NCB benefit.
- Not all health insurers offer no claim bonus. Ask your health insurer about NCB before buying a health insurance policy.
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