No Claim Bonus

How No Claim Bonus offer works in Health Insurance

No Claim Bonus is an incentive offered by insurance companies for not claiming during the policy year. It differs from company to company. It is one of the most beneficial features of having health insurance.

Usually, the No Claim Bonus (NCB) is either given as a discount from the premium or an increased sum assured. 

Types of No Claim Bonus 

No Claim Bonus is usually disbursed in two ways.

  1. Cumulative  – In the case of cumulative benefit, the no-claim bonus is given in the form of an increased sum insured for the same premium
  2. Discount on Premium – Here, the discount is given on the premium for the same sum insured. 

How does No Claim Bonus work?

Health insurance helps the individual or family to take care of their medical expenses whenever they are hospitalized. There might be some years, where you do not avail any claim from the insurance companies. It may be because you were hail and healthy throughout the policy period or you could have even spent the money from your pocket. In such cases of no claim raised, the insurance company offers no claim benefits to the policyholder. As mentioned, the no claim offer may work in two ways. Let us illustrate them with an example.


Let us assume Mr X, has bought medical insurance of Rs. 5 Lakhs for a year and he has not made any claims during the policy period. In this case, the company might increase the sum assured to Rs. 5.5 lakhs for the next year at the same premium. It means Mr X can avail increased sum assured without having to shell out extra premium.

Discount on Premium

Let us assume Mr Y, has bought medical insurance of Rs. 5 Lakhs for a year and he has not made any claims during the policy period. Over here, the company may offer a discount on his premium. If Mr Y usually has paid Rs. 5000 as the premium, he can keep the same sum insured at a reduced premium of Rs. 4500.

What are the Benefits of No Claim Bonus?

Some of the advantages of No Claim Bonus are,

  1. It promotes good health. It propels you to have clean habits and a healthy lifestyle
  2. The extra sum insured offered may act as a financial cushion
  3. You can have the option to transfer it during portability to another company
  4. It eliminates the need for unnecessary claims and fraud


The No Claim bonus percentage and type varies across different companies. In case, if a policyholder fails to renew their health plan before its expiry, the policy would lapse. During such instances, the policyholder will not receive benefits such as No Claim Bonus. Customers are advised to check the NCB benefits and types at the time of purchase of the health insurance plan. People who have health insurance must ensure they take advantage of this No Claim Bonus offer by timely renewing their health insurance plan. 

At sites like FinCover, you can easily buy/renew/port your health insurance policy in a quick time in a hassle-free manner.

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