No Claim Bonus (NCB) In Health Insurance: What it is & How It Works
Mini Balakrishnan
Health insurance goes beyond just covering medical expenses—it also rewards policyholders for staying healthy. One such benefit is the No Claim Bonus (NCB), which offers advantages to individuals who do not make any claims during a policy year.
In this guide, we’ll break down what No Claim Bonus (NCB) is, how it works, its key benefits, and strategies to maximize it, ensuring you get the most value from your health insurance plan.
What is No Claim Bonus (NCB) in Health Insurance and its Types?
The No Claim Bonus (NCB) is a reward offered by health insurance companies to policyholders who do not file any claims during a policy year. It serves as an incentive for maintaining good health and responsible healthcare usage.
NCB can be availed in two primary ways:
- Increased Sum Insured: The insurer enhances your coverage amount without raising the premium. For example, if your original sum insured is ₹5 lakh and you don’t make a claim for a year, the insurer may increase it to ₹5.5 lakh at renewal, depending on the policy terms.
- Discount on Renewal Premium: Instead of increasing the sum insured, some insurers provide a discount on the renewal premium, allowing policyholders to continue their coverage at a lower cost. This makes it more affordable while still maintaining comprehensive protection.
No Claim Bonus helps policyholders get better coverage or lower costs while encouraging them to use their health insurance wisely.
How Does NCB Work in Health Insurance in India?
For every year without a claim, the sum insured increases by a predetermined percentage, typically ranging from 10% to 50%, up to a maximum limit, often 100% of the base sum insured. If a claim is made, the accumulated NCB may decrease, but it will never reduce the total sum insured below the original coverage amount.
For instance, if a policy offers a 10% increase in sum insured per claim-free year, up to a maximum of 40%, the coverage will keep increasing annually. However, if a claim is filed, the NCB reduces by 10%, but the total coverage will never fall below the initial sum insured.
Example of NCB Calculation in Health Insurance
| Year | Base Sum Insured (₹) | NCB Percentage | Total Sum Insured After NCB (₹) |
| Year 1 | 5,00,000 | – | 5,00,000 |
| Year 2 | 5,00,000 | 10% | 5,50,000 |
| Year 3 | 5,00,000 | 20% | 6,00,000 |
| Year 4 | 5,00,000 | 30% | 6,50,000 |
| Year 5 | 5,00,000 | 40% (Capped) | 7,00,000 (Max Limit Reached) |
Note:
- If no claims are made, the sum insured increases by 10% per year, up to a maximum of 50%.
- If a claim is made, the NCB may reduce but will never lower the sum insured below the original amount.
- NCB varies from insurer to insurer and depends on policy terms.
No Claim Bonus Applies to Individual As Well As Family Floater Health Insurance Plans in India?
The No Claim Bonus (NCB) benefit is available under both individual and family floater health insurance plans, rewarding policyholders for claim-free years.
- In an individual health insurance plan, the NCB applies only to the policyholder. If no claims are made during the policy term, the sum insured increases or a premium discount is provided for that individual.
- In a family floater health insurance plan, the NCB applies to the entire insured family unit. However, if any member of the family makes a claim, the NCB benefit may be reduced or reset for the next policy year.
Regardless of whether you hold an individual or family floater plan, you can avail NCB benefits if no claims are made during the policy period, ensuring increased coverage or cost savings over time..
Benefits of No Claim Bonus (NCB) in Health Insurance
1. Increased Coverage at No Extra Cost
With each claim-free year, your sum insured grows without you having to pay more for it, giving you more financial security in case of medical emergencies.
2. Lower Premiums
In some cases, NCB can lead to premium discounts, reducing the amount you pay for the same level of coverage during policy renewal.
3. Motivation for a Healthy Lifestyle
NCB encourages you to stay healthy, prioritize preventive care, and avoid making claims, leading to better health outcomes in the long run.
4. Enhanced Trust and Loyalty
Being rewarded with NCB over time increases your satisfaction and trust in the insurance company, strengthening customer loyalty.
Limitations of NCB in Health Insurance
While NCB has several advantages, there are some limitations to keep in mind:
- Non-transferability: NCB is not transferable between insurers, so switching insurance providers can cause you to lose your accumulated NCB.
- Limited to Individual Policies: NCB is generally applicable only to individual policies, not family floater plans.
- Not for Pre-Existing Conditions: If you make a claim related to a pre-existing illness, your NCB won’t be applicable.
How to Maximize the Benefits of NCB
Choose Policies with Higher NCB Cap: Some policies may offer a higher cap on NCB, allowing you to enjoy larger increases in your sum insured.
Stick to Preventive Care: Regular check-ups and preventive healthcare can help you avoid claims and enjoy more years of NCB accumulation.
Renew Timely: Ensure timely renewals to avoid losing out on your NCB benefits due to policy lapse.
Do All Health Insurance Plans in India Offer No Claim Bonus?
Not all health insurance plans in India offer the No Claim Bonus (NCB) benefit. Policies that do include NCB come with specific terms and conditions, which vary between insurers. This makes it essential to carefully review the policy documents before purchasing a plan to ensure it provides this benefit.
When choosing a health insurance policy with NCB, it is important to:
- Check if NCB is included: Not all policies offer an NCB feature, so confirm its availability before buying.
- Understand the Terms & Conditions: Know how much the sum insured can increase per claim-free year, what the maximum cap is, and whether a claim partially or fully affects the accrued NCB.
- Compare Policies Online: Different insurers offer varying NCB percentages and limits, so comparing health insurance plans online can help you find the most beneficial option based on your needs.
By carefully evaluating these factors, you can choose a health insurance plan that not only provides coverage but also rewards you for maintaining good health through NCB benefits.
Conclusion: Is NCB Worth It?
The No Claim Bonus (NCB) is a valuable feature that rewards policyholders for maintaining good health and avoiding unnecessary medical expenses.
That being said, before selecting a policy, it’s essential to:
- Compare NCB benefits across different insurers to find the best options.
- Review claim settlement policies to ensure hassle-free reimbursements.
- Check renewal terms to confirm how NCB accumulation and reduction work in case of claims.
Would you like to explore the best health insurance plans offering high NCB benefits? Compare Health insurance policies now and secure your future!
Frequently Asked Questions About No Claim Bonus in Health Insurance
- What Happens to No Claim Bonus if I Don’t Renew My Policy?
Every health insurance policy has a fixed tenure, which can be for one, two, or three years. If you opt for a multi-year policy, you can make a one-time premium payment to avoid yearly renewals. However, if you fail to renew your policy before the expiry date, it will lapse.
In such cases, you will lose all accumulated benefits, including the No Claim Bonus. To retain the NCB benefits and ensure continuous coverage, it’s essential to renew your health insurance policy on time.
- How Many Times Can I Claim Health Insurance?
You can file multiple claims under your health insurance policy during the policy tenure. However, claims are subject to the sum insured limit. Once the total sum insured is exhausted, further claims may not be entertained unless your plan includes features like restoration benefits.
- Is No Claim Bonus Transferable?
Yes, the No Claim Bonus is transferable. If you switch to a new health insurance provider through policy portability, your accumulated NCB can be carried over to the new policy, provided the new insurer allows it. This ensures that your claim-free benefits remain intact even when you change insurers.
- Is a Cumulative Bonus Better Than a Discount on Premium?
Both options have their advantages:
- Cumulative Bonus: Increases your sum insured without extra cost, providing higher coverage for future medical needs.
- Discount on Premium: Lowers your renewal premium, reducing the cost of maintaining your policy.
