While exploring health insurance plans, you will come across a long list of factors to consider, but one that is often ignored is the No Claim Bonus, also referred to as NCB. Since there is much to take into account when buying insurance policies, many people unknowingly miss out on key features such as the No Claim Bonus, which in fact, can be quite beneficial for policy buyers.
If you have ever wondered ‘what is NCB in insurance policies?’, you are in the right place as this guide will shed light on everything about the No Claim Bonus, including answers to the most common questions. So, let’s get started!
What is NCB in Insurance Plans?
The No Claim Bonus is an added benefit included in most health insurance policies today, and it is nothing but a reward for not making any claims and staying healthy. In simple terms, NCB is an additional amount that gets added to your policy’s base sum insured when and if you have a claim-free year.
For instance, if the sum insured of your health care plan is Rs 5 lakhs and your insurer offers an NCB of five percent for claim-free years, then your coverage amount will be increased by Rs25,000. Therefore, you will then have a total sum insured of Rs 5.25 lakhs. Similarly, if you don’t make any claims for three years consecutively, your medical coverage will be 5.75 lakhs the following year.
However, the rate at which your policy’s sum insured can increase varies between 10 to 50 percent depending on the insurance provider. For example, if your plan is eligible to receive an NCB of up to 5o percent and your sum insured is five lakhs, you will only get a maximum of Rs2.5 lakhs as a cumulative bonus. So, make sure you check both these conditions carefully before choosing an insurance policy.
Now that we have ‘what is NCB in insurance?’ out of the way, let’s look at the answers to some of the most common questions about the No Claim Bonus:
- Does the No Claim Bonus Affect the Plan’s Premium Cost or Coverage?
Whether or not you have a claim-free year and receive the No Claim Bonus, the premium cost along with the coverage benefits of your policy remains unchanged. The only difference is that your sum insured gets increased.
- What Happens to the NCB if Policyholders Don’t Renew Their Insurance?
It is essential to keep renewing your health care policy if you wish to continue enjoying the benefits and features. However, the plan will lapse if you miss the renewal date. Moreover, all bonuses, including the NCB accumulated during the policy term, will expire with the plan.
- Can Policyholders Transfer the No Claim Bonus?
Policyholders can easily transfer the benefits of the NCB if they wish to switch their health care plan or even if they want to change their insurance provider.
- Can You Boost the Percentage of the NCB?
Many health insurance providers offer the option of increasing the percentage of the No Claim Bonus, but only as add-on covers or riders. Therefore, you will have to pay an additional premium or cost to boost your policy’s NCB, but the terms & conditions differ from one insurer to the other.
- Will I Lose My Accumulated NCB if I Switch from an Individual to a Family Policy?
No, you will not lose your accumulated NCB if you switch from an individual health care plan to a family floater plan. Moreover, even your family members get access to the No Claim Bonus you have received over the years. However, the percentage of the NCB can vary when you change policies.
Although we have answered all important questions related to the No Claim Bonus in health insurance, you can go through IRDAI’s guidelines on the same. Another thing to keep in mind is that you must opt for trusted insurers like Care Health Insurance that offer excellent no-claim bonuses at affordable premiums.
