No Claim Bonus (NCB) in Health Insurance: Explained Simply
Jessica Henderson Health insurance is meant to protect you during medical emergencies. But did you know that staying healthy can also save you money? This benefit is called the No Claim Bonus (NCB). Understanding how the no-claim bonus in health insurance works can help you choose the best health insurance plan and reduce your future premium burden.
This guide explains the concept in a simple way so that even beginners can understand it clearly.
What Is No Claim Bonus in Health Insurance?
A no-claim bonus in health insurance is a reward that your insurer gives you for not making any claims during a policy year. If you do not use your policy for hospitalisation or treatment, the insurer offers a benefit at renewal.
This bonus, also known as a health insurance no-claim bonus, is provided to motivate maintaining good health and avoiding unnecessary claims.
How Does Health Insurance No Claim Bonus Work?
The working of a health insurance no-claim bonus is simple:
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You buy a health insurance policy.
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You do not make any claim during the policy year.
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At the time of renewal, you receive a bonus.
The bonus is usually given in one of the following ways:
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Increased Sum Insured: Your coverage amount increases without increasing your premium.
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Premium Discount: You get a discount on your renewal premium.
The exact benefit depends on the insurer and the policy terms.
Example to Understand No Claim Bonus
Suppose you buy an insurance policy with a sum insured of ₹5 lakh.
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You do not make any claim in the first year.
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Your insurer offers a 10% no claim bonus.
At renewal, your sum insured becomes ₹5.5 lakh at the same premium. If you continue to avoid claims, the bonus can accumulate up to a certain limit.
This is why understanding no claim bonus in health insurance is important when selecting the best health insurance plan.
How Much No Claim Bonus Can You Get?
The bonus percentage varies from one insurer to another. Common ranges include:
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5% to 10% increase per claim-free year.
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Maximum bonus cap of 50% to 100%.
Some insurers reset the bonus if you make a claim, while others reduce it partially instead of removing it completely.
Always read the policy document carefully before buying health insurance.
Does NCB Apply to All Health Insurance Policies?
No. The health insurance no-claim bonus is mainly available on:
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Individual health insurance plans
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Family floater plans
It may not apply to:
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Fixed benefit plans
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Critical illness-only policies
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Group health insurance provided by employers
If NCB is important to you, check its availability before choosing the best health insurance option.
What Happens to NCB If You Make a Claim?
If you make a claim during the policy year:
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Some insurers reset the no-claim bonus to zero.
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Some insurers reduce the accumulated bonus.
However, many modern policies offer NCB protection add-ons, which allow you to keep your bonus even after making a claim.
Is No Claim Bonus Transferable?
Yes. When you port your insurance from one insurer to another, your accumulated no claim bonus in health insurance is transferred as per IRDAI guidelines.
This ensures you do not lose your benefits when switching to a better plan.
Why Is No Claim Bonus Important?
Here’s why NCB matters:
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Increases your coverage without extra cost
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Reduces long-term premium burden
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Rewards healthy living
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Makes your policy more valuable over time
For long-term planning, NCB plays a key role in choosing the best health insurance.
Things to Keep in Mind About NCB
Before relying on a health insurance no claim bonus, remember:
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It is subject to policy terms.
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It may have a maximum limit.
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It can be affected by even a small claim.
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Add-ons may be needed for protection.
Always balance NCB benefits with adequate coverage.
Final Thoughts
The no claim bonus in health insurance is a simple yet powerful benefit that rewards you for staying claim-free. It helps you build higher coverage over time and makes your insurance more cost-effective.
When comparing policies, do not just look at premiums. Check how the health insurance no-claim bonus works, how much you can earn, and whether it fits your long-term needs. This approach will help you choose the best health insurance with confidence.
