A No claim bonus is a viable way where an insurance company would be rewarding a policyholder for not having claimed a policy in a year. When purchasing car insurance term NCB means in insurance is common but a lot of us would be surprised to figure it is applicable in health insurance. It is one of the important pointers to consider when you are planning to purchase a health insurance plan. There are a few considerations that you need to be aware of when it comes to No claim bonus in a health insurance plan.
No claim bonus in the health insurance policy
In a health insurance policy, there are a couple of considerations that you need to be aware
- Cumulative bonus- if you are thinking on the lines of a claim free year, the coverage amount would be increased, though the premium turns out to be the same. It is the case of cumulative no bonus. Suppose there is a health insurance policy offering 5 lakh coverage and the company would be providing 5 % no claim bonus every year. So if you have not gone on to make any claim in the first year it would increase to 5.25 in the next year. When it is a case of two consecutive no claim bonus years, the coverage amount would be 5.5 lakhs and so on. It means that in the third year if you are hospitalized you can claim up to 5.5 lakh.
- Discount on premium- there may be a discount on no premium claim. Here the amount of premium would decrease by a certain percentage, though the coverage amount would be the same. Let us explain things with an example as if you are having a health insurance policy of 5 lakh and you will be shelling out Rs 10,000 as premium every year. Now an insurer would be offering a discount of 5 % on no claim bonus every year. When you are renewing the policy you need to be paying Rs 9,500. But the amount of coverage would still be the same.
But among both the two cumulative bonus still remains popular among the masses.
A limit exists on the amount of coverage that may increase through cumulative no bonus
The coverage amount would be increased by a cumulative no claim bonus, there exists a limit to it. Normally this limit would range in the bracket of 50 to 100 %. Even though the terms along with conditions would be different for each insurance company.
An example is that you would be having an insurance policy with 2 lakh coverage. An insurer would allow up to 50 % coverage through no cumulative no claim bonus. What it means is that your insurance coverage amount would be increasing by 1 lakh every year. As it may be from 2 lakh to 3 lakh which should not be much beyond that.
A no claim policy would be applicable to an individual and a family floater policy
An individual plan is one that would be covering a particular policyholder. On the other hand, a floater family policy would be extending coverage to the entire policy. So if you are having an individual health insurance plan and do not make a claim during the course of a year, you are bound to receive a no claim bonus. Now if it is the case of a floater policy, if no member goes on to claim a health insurance policy during the year, then this no claim bonus would be extended to the next year.
All the health policies do not offer any claim bonus.
All the health insurance policies do not have an option of no claim bonus. Care health insurance is the only one that ends up providing extensive coverage of sorts. Any policy that does not provide any claim might be having its own set of terms along with conditions. So it is necessary that you read the blueprint of a health insurance policy before you purchase them. If yes what is going to be the terms along with the conditions? You need to have an idea on what is the percentage of no claim bonus and by what amount the overage may be increased.
When you are purchasing health insurance a claim bonus is one of the important points to consider. Once you are comparing the terms along with conditions, have an idea about the no claim bonus. Always opt for the policy which would suit you the best. Of late medical inflation has led to a significant rise in hospitalization and medical-related expenses. So it is better if you have proper precautions in place.