No claim bonus in health insurance is a benefit offered by an insurer when you complete a policy year without making a claim, subject to the terms and conditions of your health insurance policy. Depending on the policy, the bonus increases your sum insured without a corresponding increase in the base premium or offers a premium discount, at renewal.
In simple terms, no claim bonus in health insurance rewards you for staying claim-free. It can help you build greater financial protection over time without necessarily having to purchase a higher base sum insured from the beginning.
For example, if your health insurance policy has a sum insured of ₹5 lakh and provides a cumulative bonus of ₹1 lakh for every claim-free year, your available coverage could increase to ₹6 lakh after one eligible claim-free year, subject to the policy's maximum limit.
The exact benefit, accumulation rate and maximum bonus vary between health insurance policies. Therefore, always check your policy wording to understand how your NCB works.
The basic principle behind health insurance no claim bonus is straightforward.
You purchase a health insurance policy with a specified sum insured. If you complete the policy year without making a claim, the insurer will provide an NCB at renewal, if offered by your policy. Depending on your choice, this can be either added to your sum insured or provided as a % discount on your premium.
For example:
| Claim-free period completed | Base sum insured | NCB added | Total available cover* |
|---|---|---|---|
| At inception | ₹5 lakh | — | ₹5 lakh |
| After Year 1 | ₹5 lakh | ₹1 lakh | ₹6 lakh |
| After Year 2 | ₹5 lakh | ₹1 lakh | ₹7 lakh |
| After Year 3 | ₹5 lakh | ₹1 lakh | ₹8 lakh |
*Actual accumulation depends on the terms of the health insurance policy.
This means your protection can grow as you maintain a claim-free record.
However, NCB is not a refund of the premium paid. Under the current IRDAI framework, it is provided as a cumulative bonus and/or a discount on the renewal premium
No claim bonus medical insurance benefits can be structured in different ways. Two common approaches are cumulative bonus and premium discount. Under the current IRDAI framework, where an insurer offers NCB, the benefit is provided at renewal based on the policyholder's choice or express consent as a cumulative bonus and/or a discount on the renewal premium.
A cumulative bonus increases your health insurance coverage after a claim-free policy year.
For example, a policy can offer an additional 10% of the base sum insured for every claim-free year, up to a specified maximum.
If your base sum insured is ₹5 lakh and the policy provides a 10% cumulative bonus, you could receive an additional ₹50,000 after an eligible claim-free year.
The important point is that the bonus is added to your coverage rather than paid to you as cash.
Health insurance policies can also offer a discount on the renewal premium after a claim-free year.
Here, the benefit is reflected in the amount you pay to renew your policy rather than an increase in your sum insured.
There is no universal answer to what constitutes the best no claim bonus health insurance.
A cumulative bonus can be more valuable if your priority is to increase the amount available for future medical expenses.
A premium discount could be more attractive if reducing renewal costs is your priority.
Compare:
The calculation depends on the structure specified in your policy.
For a cumulative bonus, the insurer calculate the NCB as a percentage of the base sum insured.
For example:
The total coverage could therefore become ₹6 lakh at renewal, subject to the policy's maximum cumulative bonus.
If the policy allows a maximum cumulative bonus of 100% of the base sum insured, the coverage could potentially increase to ₹10 lakh over multiple claim-free years.
However, these figures are only an illustration. The actual bonus on no claim in health insurance depends on your insurer's policy terms.
It is also important to check whether the NCB is calculated on the original base sum insured or another amount specified in the policy.
A cumulative NCB can increase your available sum insured over time. This can be useful because healthcare costs rise as you get older.
A higher available sum insured can help you manage the financial impact of a major hospitalisation or treatment, subject to the policy's coverage and limits.
NCB provides an incentive for maintaining a claim-free policy year. Instead of losing the benefit of a year without claims, you may receive additional coverage or another renewal benefit.
If your policy provides cumulative benefits without proportionately increasing the base premium, your effective coverage can grow while you continue with the same policy.
Maintaining continuous health insurance can allow you to build benefits over multiple renewals, subject to the policy's NCB conditions and maximum limits.
One of the most important things to understand about no claim bonus in health insurance means is that the benefit is linked to your claim history.
If you make a claim, your accumulated NCB can be either reduced, reset or otherwise affected depending on the policy.
For example, a policy states that a claim during the policy year will reduce the cumulative bonus earned previously. Another policy allow a certain number or type of claims without affecting the accumulated benefit.
Health insurance products also offer an NCB protection feature that helps preserve the accumulated bonus under specified circumstances.
Therefore, do not assume that one claim will automatically eliminate your entire NCB. Check the specific reduction or protection rules in your policy.
NCB can work differently depending on whether you have an individual health insurance policy or a family floater.
With an individual plan, the policy covers one insured person. If the policy remains claim-free and provides an NCB, the benefit applies to that individual's coverage according to the policy terms.
For example, a ₹5 lakh individual policy could accumulate additional coverage over successive claim-free renewals if its terms provide for a cumulative bonus.
A family floater provides a shared sum insured for multiple members of the family.
If the policy provides an NCB, the accumulated benefit increases the overall family sum insured rather than create a separate bonus for each family member.
For example, if a family floater has a ₹10 lakh base sum insured and earns a cumulative bonus, the enhanced amount becomes available to the covered family members collectively.
Health insurance portability allows a policyholder to move an eligible health insurance policy from one insurer to another at renewal. Under IRDAI rules, the policyholder is entitled to transfer accrued credits to the extent of the sum insured, No Claim Bonus, specific waiting periods, pre-existing disease waiting period and moratorium period, as applicable.
When porting your health insurance, the accumulated NCB be carried forward to the extent permitted under applicable regulations and the new insurer's policy terms.
However, portability does not necessarily mean that every feature of your old policy will be reproduced exactly in the new policy.
Before porting, compare:
Ask the new insurer to confirm how your accumulated benefits will be treated before completing the porting process.
An NCB protection add-on is designed to protect an accumulated no claim bonus against reduction following specified claims.
Without such protection, making a claim will affect the bonus you've accumulated over previous policy years.
For example, imagine that your ₹5 lakh policy has accumulated an additional ₹3 lakh through NCB. If your policy's terms state that a claim reduces the accumulated bonus, your enhanced coverage could fall after a claim.
An NCB protection benefit can help preserve some or all of that accumulated bonus, depending on the terms.
However, NCB protection is not automatically included in every health insurance policy. It may be available only with specific products or as an optional add-on.
Before choosing a policy based on its NCB benefits, look beyond the headline percentage.
A higher percentage does not necessarily mean a better policy. Check how the percentage is calculated and how frequently the benefit is added.
Find out how much your NCB can accumulate. Policies can cap the cumulative bonus at a specified percentage of the base sum insured.
Read the rules governing reduction, reset or continuation of the NCB after a claim.
These are different benefits. Make sure you understand what you actually receive.
If preserving your accumulated bonus is important to you, check whether an NCB protection feature is available.
NCB should not be the only factor when choosing health insurance. Also evaluate the sum insured, waiting periods, exclusions, room-rent conditions, co-payment, network hospitals, claim process and other applicable benefits.
When evaluating ncb health insurance, look for a policy that combines NCB benefits with meaningful overall health protection.
Universal Sompo offers health insurance plans with features and benefits designed to support healthcare expenses, subject to the terms and conditions of the selected policy.
Before purchasing a plan, review the applicable policy wording to understand:
No claim bonus in health insurance rewards policyholders for completing eligible claim-free periods by providing benefits such as an increase in sum insured or a premium-related benefit, depending on the policy.
A cumulative bonus can be particularly useful because it allows your health insurance coverage to grow over time. However, the amount you can accumulate, what happens after a claim and whether NCB protection is available vary by policy.
When comparing health insurance plans, look beyond the NCB percentage. Consider the overall coverage, exclusions, waiting periods, claim conditions and premium to determine whether the policy genuinely meets your healthcare needs.