Explaining Cumulative Bonus In Health Insurance


A health insurance policy is your best bet at keeping your finances protected during a medical emergency. Therefore, it is extremely important to select the right type of health coverage plan for the best protection. Now, many people tend to skimp on medical insurance by selecting the plan with the cheapest premium. They often do this because they feel that if they do not make a claim on their health insurance policy, the premiums paid till date have been a total waste. However, that is not true. If you don’t make a claim, your health insurance provider rewards you with a cumulative bonus. Interested to know more? Do read on to learn all about the cumulative bonus feature on your health insurance.

What is cumulative bonus?

The cumulative bonus is a reward that your insurance provider gives you for not making any claims on your health insurance policy during the past year. The bonus is offered as a percentage of increase on the sum for which you are insured. For instance, if you receive a cumulative bonus of 10% for making no claims on a health insurance policy of Rs 3 lakhs, your coverage for the second year gets bumped up by 10% of Rs 3 lakh to equal a new coverage amount of Rs 3,30,000.

The cumulative bonus is also commonly known as a ‘no-claim bonus’ or NCB.

How much of a bonus can I get?

The cumulative bonus calculation may vary between insurance providers. A standard health insurance policy usually offers a bonus that gives a 10% increase on the amount insured for the first claim-free year. This bonus can subsequently increase to a 20% increase in the sum insured for the second claim-free year. The limit for increase is usually set at 50%. It is recommended that you discuss your insurance provider’s policies with them to know the exact cumulative bonus amount you can expect.

What happens if I switch providers?

You will be glad to know that you can still claim the cumulative bonus even if you switch between health insurance providers. Therefore, if you have been considering buying a health insurance policy this year from a new company, you can go ahead and do so. Your new insurance providers too will reward you with a bonus on your policy based on the fact that you didn’t make a claim through your previous insurance company in the past year. Do note that cumulative bonus benefits can vary between insurance companies. So, your new providers may have their own rules and calculations for the bonus that is due to you. The calculations of your old policy may not hold.

The cumulative bonus is indeed a fabulous reward for the policyholder. You receive additional coverage at no extra cost simply for staying in good health in the past year. Do make sure to discuss the details of the cumulative bonus with your insurance provider prior to signing up for a health insurance policy. We hope this article has proved helpful for you. Take care and stay fit!

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