No Claim Bonus Health Insurance: How it Works, Types & Benefits
The symphony of words like ‘bonus’ often resonates with positivity, but when ‘No’, ‘Claim’, and ‘Bonus’ converge, one might be sceptical. The moment these words are placed alongside each other, they may force one to raise eyebrows, triggering questions.
However, there is nothing to worry about, as these words can considerably enhance one’s health insurance experience. But the question arises how? Well, this article will cover everything about no-claim bonus types and benefits of a claim bonus and how it works. So let’s get started.
What is a no Claim Bonus?
Most insurance companies with good claim settlement ratio health insurance give a special perk to policyholders who haven’t made any claims during their policy period, known as no claim bonus. It’s like a reward for staying healthy and not taking off insurance. This bonus is calculated as a percentage, and when added to the initial coverage amount, it makes the total coverage even higher. It’s a way to encourage people to take care of their health.
Furthermore, having an insurance company with a good claim settlement ratio of health insurance is necessary to consider when buying health insurance. Last year, the health insurance claim settlement ratio IRDA was 98.64 per cent.
What are the Types of no Claim Bonus?
There are generally two types of no-claim bonuses:
1. Cumulative Bonus
Under this type of bonus, when the policyholder goes a whole year without making any claims, the coverage amount or sum insured of the policy increases by a certain percentage. However, the premium for the policy stays unchanged.
2. Premium Discount
In this particular type of no-claim bonus, the rate of renewing the policy’s premium drops by a specific percentage for every year that goes by without filing a claim. However, it’s important to note that while the premium gets lower, the money the policy covers, known as the sum insured, stays the same.
How Does no Claim Bonus Work?
To get a good provider, considering the claim settlement ratio for health insurance is a must thing to do. It will help to get the claim smoothly, and in case no claim is made, one can get a no-claim bonus too. Here is a step-by-step breakdown of how the no-claim bonus work.
1. Policy Renewal
When a policyholder renews their health insurance policy, the insurer examines its history, focusing primarily on past claims.
2. Claim-Free Year Recognition
After checking, if the policyholder has refrained from raising any claims during the policy term, that year is designated as a claim-free year. This status makes the customer eligible for the no-claim bonus.
3. No Claim Bonus Calculation
The NCB is calculated based on consecutive years without claims. It’s computed as a percentage, but the exact percentage can vary depending on the insurance company and the specific plan.
4. Premium Discount Application
The health insurance no-claim bonus is translated into an addition to the sum insured. For instance, if the new policy’s sum insured is ₹20,000, the NCB percentage is 20%, and no claims are made, the NCB amount will be ₹4,000. Consequently, the new Sum Insured becomes 24,000. However, the premium to be paid remains at the original ₹20,000.
5. Transferability
If the policyholder decides to switch to a new insurance provider, the accumulated NCB can be transferred. It allows for the continuity of the no-claim bonus benefit.
What are the Benefits of a no Claim Bonus?
The no claim bonus offers several advantages to policyholders, which are worth considering:
1. Enhanced Financial Security
The no claim bonus ensures improved financial protection for the policyholder and their family during unexpected medical emergencies.
2. Reduced Renewal Costs
The bonus contributes to lowering the expenses associated with renewing a best health insurance policy. Gaining increased coverage at a reduced premium gives policyholders more value for their investments.
3. Health Incentive
The no claim bonus acts as an incentive for policyholders to maintain good health and well-being. It encourages them only to make claims when necessary, promoting a healthier lifestyle.
4. Widespread Availability
Most health insurance companies in India extend the benefit of a no-claim bonus in individual and family health insurance plans. However, the specific terms and conditions may vary across insurers.
Conclusion
In health insurance, the no claim bonus emerges as a valuable incentive. It nurtures a mutually beneficial relationship between policyholders and insurance providers. This particular advantage serves as a recognition for individuals who maintain good health by abstaining from claims during their policy tenure.
Considering the claim settlement ratio in health insurance and the benefits of the no-claim bonus, it is the ideal time to secure your health and future with Niva Bupa health insurance companies. According to IRDA, Niva Bupa has a claim settlement ratio of health insurance, which is 99.99%. This claim settlement ratio of health insurance is a testament of their commitment to its customers.
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