No Claim Bonus in Health Insurance

If you have ever wondered, “What exactly is this No Claim Bonus everyone talks about in health insurance”? - You are not alone. Many people encounter the term shortly after purchasing a policy or while comparing plans, and it can be a bit confusing at first.

The good news?

The concept is actually straightforward - and incredibly rewarding.

In this guide, we’ll walk through-

1. What does No Claim Bonus (NCB) mean
2. How insurers reward you for staying healthy
3. Types of NCB in health insurance
4. How it affects your premium
5. The benefits, limitations and things to watch out for
6. Tips to make the most of it
7. A clear, friendly FAQ section

Let’s get started

What Is a No Claim Bonus?

A No Claim Bonus is a reward you receive from your health insurance provider for not making any claims during a policy year.

Think of it like a “thank you” for staying healthy.

If you complete a year without any hospitalisation claim, your insurer says:

“Great job! You didn’t use your cover this year. Let me increase it for next year - free of cost.”

This reward is known as the No-Claim Bonus in Health Insurance.

It’s one of the most loved features among customers because it helps you build a much larger sum insured over time without paying extra.

How Does No Claim Bonus Work ?

Let’s say you buy a health policy with:

1. Base sum insured: ₹5 lakh
2. NCB offered: 10% per claim-free year

Now:

Year 1

1. You make no claims
2. Your NCB kicks in: 5,00,000 + 50,000 = ₹5.5 lakh cover

Year 2

1. Again, no claims
2. Your new sum insured becomes: ₹6 lakh

Year 3

1. Still claim-free
2. Your cover becomes ₹6.5 lakh

You didn’t pay extra for this. It came as a free reward for maintaining a claim-free record.

Most insurers allow your No Claim Bonus to grow up to 50%, 100%, or even 200% of your base sum insured.

Why Do Insurers Offer NCB?

It encourages:

1. Better health habits
2. Lower claims every year
3. Long-term policy renewals
4. Customer loyalty

It’s a win–win: You stay healthy and your insurer rewards you generously.

Types of No Claim Bonus in Health Insurance

This is where many people get confused, so let’s simplify it with a friendly explanation.

There are two main types:-

1. Cumulative No Claim Bonus

This is the most common type.

Here, the insurer increases the sum insured every time you complete a claim-free year.

For example:

1. 10% increase
2. 
   
3. 20% increase
4. Up to 100% or 200% over time

The key benefit ?

More cover at the same premium.

2. Discount on Premium (Lesser Common)

In this type of NCB, your premium reduces when you don’t make a claim.

However, you should know:-

1. Fewer insurers offer this
2. Cumulative bonuses are more popular and more valuable
3. Premium discounts are usually small compared to sum insured bonuses

Benefits of No-Claim Bonus in Health Insurance

NCB comes with a long list of advantages. Here’s a quick look:

1. Higher Coverage Without Paying More

Your sum insured grows every year.

You get more protection without increasing your annual premium.

2. Protection Against Medical Inflation

Hospital bills rise every year.

Your growing NCB helps cover that inflation.

3. Helps You During Major Illness

If a medical emergency hits after several claim-free years, your NCB-backed sum insured can make a real difference.

Imagine having:

1. ₹5 lakh base
2. ₹5 lakh NCB

That’s a total of ₹10 lakh cover - without paying for a ₹10 lakh policy.

4. Encourages Healthier Living

Knowing you’ll get rewarded for not falling ill motivates people to:

1. Exercise more
2. Go for frequent check-ups
3. Keep maintaining a healthy diet

5. Works for Family Floater Policies Too

If no one in your family claims during the year, the NCB applies to the entire family's sum insured.

Does No Claim Bonus Affect Premium?

This is a very common doubt.

Answer: NO.

Your premium generally stays the same even though your sum insured keeps increasing.

The NCB is like an add-on gift - free of charge.

However:

1. If you change your policy
2. Or increase your base sum insured
3. Or your age moves to a new premium slab

Your premium may change.

But NCB itself does not directly increase premiums.

What Happens to NCB If You Make a Claim?

Another popular question.

Most people think:

“If I make one claim, will I lose my entire benefit” ?

Not necessarily.

Two scenarios:

Scenario 1: You Lose a Portion of NCB

Many insurers simply deduct a part of your accumulated NCB.

For example:

1. You built ₹4 lakh in NCB
2. You made a claim
3. Your NCB reduces to ₹2 lakh

It usually doesn’t drop to zero unless the insurer’s terms say so.

Scenario 2: You Don’t Lose Anything (If You Have NCB Protection)

Some plans come with:

NCB Protection Add-on

This means:

1. Even if you make a claim
2. Your NCB remains intact

You keep all your earned bonuses.

This add-on comes at a small additional cost but is very useful, especially for families or senior citizens.

Is No Claim Bonus Transferable?

Yes!

When you switch insurers through portability, your NCB also gets transferred.

This is great because:

1. You don’t lose your earned rewards
2. You can freely switch to a better plan
3. You continue enjoying higher sum insured instantly

What Does NCB Not Apply To ?

This depends on the insurer, but usually:

1. OPD expenses
2. Day-care procedures (in some plans)
3. Wellness consultations

do not count as a “claim”, which is great.

But:

1. A hospitalisation
2. A big treatment claim
3. Surgical procedures

These will impact your NCB.

How to Maximise Your No-Claim Bonus

Here are simple, practical tips:

Keep claims only for major expenses

Avoid using your insurance for small bills.

Choose plans with higher cumulative NCB

Some offer up to 100% or 200%.

Consider NCB Protection Add-on

Ideal for families who have kids or older members.

Keep maintaining a healthy routine

With regular check-ups, a good diet and exercise help in the long run.

Compare policies before buying

Not all NCB structures are the same.

Go for insurers with transparent NCB rules.

Common Myths About No Claim Bonus

Let’s get to the bottom of a few misconceptions:

Myth 1: You lose all NCB after one claim

Not true. Most insurers only reduce a portion.

Myth 2: NCB makes the premium cheaper

Mostly false.

It increases your sum insured, not reduces your premium.

Myth 3: NCB works the same for all insurers

No. Each insurer has its own structure and limits.

Myth 4: You can claim NCB as cash

No. It’s a benefit added to your policy cover, not a payout.

Why No Claim Bonus Matters Today

Healthcare costs rise every day.

Even a simple surgery can cost ₹2–3 lakh now.

So having a growing sum insured gives you a cushion - without paying for a bigger policy from the start.

It’s one of the smartest features in a health insurance plan.

Whether you are:

1. A young professional
2. A parent with a family
3. A senior citizen
4. Or someone wanting extra financial protection

NCB ensures your coverage keeps growing with you.

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