Mumbai, December 16: Health insurance brings along with itself a lot of benefits, mainly covering our health risks and assisting us with financial aid at the time of medical emergencies. However, there are few other benefits attached to a health insurance plan, one of which is no-claim bonus.
What is no-claim bonus?
No-claim bonus in case of health insurance is bonus money added to the sum insured for every claim free year. Such a practice is undertaken by insurers to encourage renewal of the health insurance policy. A health insurance policy provides cover for a period of one year and if no claim is made during this period, then on renewal the sum insured will be increased for next year by the insurer. This addition will be the no claim bonus, which would generally be a percentage of the previous year’s sum insured. Such a benefit is provided by most of the insurers.Many insurers offer incremental cover up to 10 per cent of sum insured added for every claim free year and maximum upto 50 per cent.
For instance, if a policyholder buys a health insurance plan with Rs 5 lakh sum insured cover and did not make any claim during the first year of the policy term. Under the no claim bonus, the policyholder could get a cumulative bonus of 10 per cent (Rs 50,000) of sum insured added to the existing sum insured. After the policy is renewed the total sum insured will be Rs 5,50,000. Similarly, in the second year if the policyholder does not make a claim then a cumulative bonus of 20 per cent will be given, taking total sum insured to Rs 6,00,000. This benefit gives the policyholder a higher sum insured for every claim free year.
Few health insurance providers also offer discount on premium for every claim free year. The policyholder will pay lesser premium and enjoy higher sum insured. However, the terms of conditions of the respective insurance company influence the amount of cumulative bonus or discount on the premium.
Few insurers also offer free health check up once for every year or two years of continuous claim-free years, in designated network hospitals. Another advantage of no claim bonus is that it is applicable under health portability. If the policyholder did not make any claim during the particular year all the benefits under no-claim bonus will be applicable if the policyholder changes to another health insurance provider. This means the acquired no claim bonus for every claim-free year is transferable to another policy with the same or different health insurance provider.