The term 'bonus' has a very pleasant connotation. When combined together, though, one would ask if these three words – No, Claim, and Bonus – have a similar impact. No Claim Bonus (NCB) in health insurance or NCB insurance is a reward for not filing a claim, and in itself, is an added benefit to the insurance.
The Meaning Of NCB Insurance
No claim bonus, or NCB, is a bonus amount that is added to the sum insured amount for each year without a claim. It's a type of incentive insurance firms give to policyholders who don't file a claim within a given policy period.
When purchasing health insurance, you should examine the 'No Claim Bonus' in addition to the policy premium, inclusions, exclusions, network hospitals, and claim settlement percentages.
NCB Insurance As An Add-On
An add-on is a further advantage that you may get for a fee. For example, if no claims were filed during the preceding policy period, the No Claim Bonus Add-on would enhance the bonus percentage at renewal.
It's worth noting that acquiring this add-on will raise the premium you'll have to pay. As a result, before purchasing the add-on, it is recommended that you carefully consider the premium, your health status, and the apparent benefit.
Why Is NCB Insurance So Important?
One of the most significant issues in the healthcare sector is the rate of inflation. To combat the rising cost of healthcare-related services, you'll need a health insurance policy with a No Claim Bonus. When you go a year without filing a claim on your policy, you can raise your sum insured in this way.
What Happens If You Make A Claim In NCB Insurance?
If you claim in a given year, the bonus amount you have accumulated as no claim bonus will be decreased by a little amount. It could, however, be a major setback for you.
For example, if you have an insurance policy with a sum insured of INR 2 lakh and do not claim for ten years, your total insured amount will be INR 3 lakh, assuming a 10% rate increase. However, if you file a claim in the eleventh year, the sum insured will be decreased by 10% when you renew the policy, bringing the total amount to INR 2.70 lakh.
You should keep in mind that you will be paid a bonus for every year that goes by without you filing a claim. So you'll get the bonus if you go a year without filing a claim after filing one. The NCB insurance is entirely dependent on the year in which you have made no claims. It's also crucial to note that the insurer can reduce your bonus amount if you make a claim, but the amount of your sum covered will not change.
There is no way to guarantee that you will receive the no-claim bonus from your health insurance. You cannot avoid filing a claim if you have a medical ailment or need hospitalization. You do, however, get a reward for every year you go without being sick or being admitted to the hospital. In the event of a catastrophic sickness or the need for medical treatment, you have no choice but to forego the incentive.
An Example- How Does NCB Insurance Work?
If Mr. Sumant purchases a health insurance plan with an amount insured of Rs. 5 lacs and does not file a claim in the first policy year, he would receive a cumulative bonus of 5% upon renewal, bringing his total sum insured for the next year to Rs. 5, 25, 000. Thus, instead of Rs. 5 lakhs, he can now claim up to this amount.
Similarly, if he does not file a claim in the second year, he will receive a cumulative bonus of 5%, which would result in a sum insured increase, bringing his total sum insured to Rs. 5,50,000. This incentive of NCB insurance might be worth up to 100% of the insured amount.
Bottom Line
The objective is only to claim when it is truly necessary. Making claims can damage your claim history, and insurance companies may raise your premium based on how frequently you file claims. If you don't make any claims, this indicates that you live a healthy lifestyle. Staying in shape is essential to avoid being ill and filing claims. Your no claim bonus or cumulative bonus will continue to grow to the point where it will cover you when you need it most.
