You must have heard about the term ‘no claim bonus’ by your insurance agent. But what is a no-claim bonus (NCB)? This article will help you in understanding the concept of a no-claim bonus with respect to health insurance. Also, to solidify this concept, this article will drive home the concept of NCB with illustrations and examples. Let us begin.
No claim bonus (NCB) is a bonus coverage provided to the insured if the insured does not raise a claim within a stipulated amount of time. It is a reward provided to the policyholder for not raising a claim. The insurance company will provide a predetermined additional coverage to the insured as a bonus for keeping their health in check and thereby not making a claim.
Let us understand the concept of NCB with a simple example. Let us assume Mr. Mangesh purchased a health insurance policy with Bajaj Allianz Health Insurance. His policy provides him with coverage of Rs 10 Lakhs along with an NCB clause. According to this clause, if Mr. Mangesh does not make a claim, each year he will get additional coverage of 10% on his basic sum assured (i.e Rs.10 Lakhs) up to a total of 50%.
|Years||No Claim Bonus (NCB)||Total Coverage|
|1||1 Lakh||11 Lakhs|
|2||1 Lakh||12 Lakhs|
|3||1 Lakh||13 Lakhs|
|4||1 Lakh||14 Lakhs|
|5||1 Lakh||15 Lakhs|
At the end of the first claim-free year, Mr. Mangesh’s total coverage will increase from Rs 10 Lakhs to Rs 11 Lakhs. In the second year, it will increase to Rs 12 Lakhs. This increment will only last till his coverage reaches Rs 15 Lakhs. In the interim, if he makes a claim, his next year’s coverage will again roll back to the initial sum assured (Rs 10 Lakhs).
|Health Insurance Companies||No Claim Bonus (NCB)|
|Manipal Cigna||Up to 200%|
|Apollo Munich||Up to 100%|
|Max Bupa||Up to100%|
|Aditya Birla||Up to 100%|
|Care Health Insurance||Up to 100%|
|HDFC ERGO||Up to 50%|
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