No Claim Bonus Health Insurance

There are a number of terms and jargons associated with a health insurance plan. If you find it difficult to choose between the policies available in the market, you need to begin with understanding the health insurance terms. While purchasing an insurance policy, ‘no claim bonus’ is an important terminology, which you should be aware of.

No claim bonus is one of the most important aspects associated with health insurance. Insurance providers offer no claim bonus to you the as a reward for not availing the claim during the period of the health insurance policy. Some companies provide the no claim bonus during the tenure of the policy and some offer an increase in the sum assured as a replacement for no claim bonus. The companies that have no option of a no claim bonus offer a rebate on the renewal premium.

The health insurance no claim bonus is offered when you make no claims during the period of the policy. It is a count of the number of years when you have not filed a claim. The bonus can be accumulated for a period of ten years. It can be received at the end of the policy period and the amount will be stated in the policy document. In order to ensure you do not miss the opportunity to avail of the accumulated bonus, it is important to renew the policy by the due date.

The no claim bonus received by you on a particular health insurance policy can be transferred to a newinsurance policy from a different insurance provider. The details about the no claim bonus rate will be provided in the documents of the policy and withdraw the same.

If you make a claim in a particular year, the bonus amount, which has been accumulated in the form of no claim bonus, will be reduced by a small amount. However, it could be a serious setback to you. For example, if you have an insurance policy with a sum insured of INR 2 lakh and you do not make a claim for ten years, then your total sum insured will be INR 3 lakh considering a 10% rise in the rate. Now, if you make a claim in the eleventh year, the amount of sum insured will be reduced by 10% when you renew the policy, which means the amount will be INR 2.70 lakh now.

You need to keep in mind that every year that passes by without you making a claim; you will receive a bonus for the same. If you have a claim free year after making a claim, you will receive the bonus. The no claim bonus totally depends on the year you make no claims. It is also important to know that the insurer can reduce the bonus amount when you make a claim, but when it comes to sum insured, the amount will remain the same.

There is no certain way of ensuring that you receive the health insurance no claim bonus. If there is a medical condition or a need for hospitalization, you cannot avoid making a claim for the same. However, for every year you spent without an illness or hospitalization, you earn a reward for the same. You have no choice but to give the bonus a miss in times of a critical illness or requirement of medical treatment.

The inflation rate is one of the biggest challenges in the health care industry to tackle the rising cost of healthcare-related services, you need a health insurance policy that offers No Claim Bonus. This way, you can increase your sum insured when you do not make any policy claim for a year.

Here is an example that can help you understand how No Claim Bonus works:

Imagine Mr. Das has a health insurance policy of INR 2 lakh. So, if the No Claim Bonus is 5%, and it is offered as a sum insured then after the first no-claim year, the sum insured will be INR 2.10 lakh. After the second no-claim year, it will be INR 2.20 lakh. No Claim Bonus comes with a maximum benefit limit, which varies depending on your insurer.

Products such as Activ Health, Activ Assure, Activ Care offer this benefit.