Many insurers encourage you to stay healthy by rewarding you when you don’t make any claims on your health insurance. This reward, called a No Claim Bonus (NCB), can significantly increase your sum insured year after year, providing extra financial protection without raising your premium.
Here’s how it works: Suppose you start with a cover of ₹5 lakhs. If you don’t make any claim during the policy year, the insurer might increase your sum insured by 50% the next year. That means your cover rises to ₹7.5 lakhs. If you continue to stay claim-free, the next year, it could go up again by 50%, reaching ₹10 lakhs. Typically, the bonus increase stops once your cover doubles in value.
But remember, if you do make a claim after receiving a No Claim Bonus, the insurer usually reduces your sum insured by the same bonus amount. For example, if your cover is ₹10 lakhs due to NCB and you claim insurance, your cover could drop back to your original ₹5 lakhs in the next period.
This can be a valuable benefit, giving you more protection as long as you remain healthy and don’t require the insurer’s help. However, watch out for the size of the bonus—anything below 10% increment annually may not be substantial and could just be a marketing tactic.
In summary, No Claim Bonus rewards healthy policyholders with a growing cover, making it a nifty feature to look for when choosing health insurance. Just ensure that the bonus percentage is meaningful and the terms suit your needs.