Definition
No-Claim Bonus (Health)
A health no-claim bonus rewards a claim-free policy year by increasing the sum insured at no extra premium, or by giving a premium discount.
Many Indian health plans grant a cumulative bonus, boosting the base sum insured by a fixed percentage for each claim-free year up to a maximum, so a policyholder's effective cover grows over time without paying more. Some plans instead offer a premium discount.
If a claim is made, the accumulated bonus may reduce, though some plans protect it. This feature effectively increases protection against medical inflation for those who stay claim-free and is distinct from the motor NCB, which discounts premium rather than raising cover.
Related terms
- Restoration BenefitRestoration (or recharge) benefit automatically reinstates the health policy's sum insured once it is exhausted during a policy year, providing fresh cover for further claims.
- Cumulative BonusCumulative bonus is the accumulating increase in a health policy's sum insured granted for each consecutive claim-free year.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.