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Decoding Cumulative Bonus

Zopper Team Basics of Insurance February 19th, 2024
What is Cumulative Bonus?

The word ‘bonus’ is always good news, even in insurance parlance. While most people know about the bonus they get in the form of NCB in car insurance, did you know you can get a similar bonus in health insurance as well?

Just like no claim bonus in car insurance is received by the policyholder for not making a claim in a policy year, your insurance provider may award you a claim-free policy year. Let us get into the details.

A no-claim bonus, generally referred to as a cumulative bonus in health insurance, is a benefit that a lot of insurers provide. It is awarded to those policyholders who go claim-free for a year. The benefit can be given in the following ways:

  • Discount on the premium:
    The bonus gets you a discount on the upcoming premium. For example, you purchase a health plan in the year 2023, and the whole year goes by without you making a claim. In such a scenario, you may get a discount on the premium that you have to pay at the time of policy renewal for the year 2024.

  • Increase in the sum insured:
    Some health insurance companies give the cumulative bonus by offering an increase in the sum insured, which can go up to 100% of the sum insured or as mentioned in the policy document.

    For example, you have a health plan of INR 10 lakhs. You do not make a claim in the first year, so at the time of renewal, your sum insured will be increased by say 50%, and hence, will now be INR 15 lakhs. If you do not make a claim in the next policy year also, your sum insured for the third year would be INR 20 lakhs. 

  • Value-added services:
    Some companies pay out the cumulative bonus in kind. Here you receive benefits like access to a wellness program, wellness coach, free preventive check-ups for insured members etc.

Before enrolling yourself with an insurance company, make sure you find out all the details and then make a well-informed decision. 

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