Health Insurance 4577 views December 12, 2019

Religare Health Insurance No Claim Bonus

With increasing inflation rate every year and cost of medical expenses growing high, it’s essential to protect ourselves from sudden financial loss and therefore Health Insurance has now become an integral part along with life insurance. Choosing the right health insurance company again becomes a very important aspect. Let’s understand a few aspects of health insurance. 

Health Insurance

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What is Health Insurance?

Health Insurance is a protection that gives us a cushion against all unforeseen and unwanted health hazards. Health Insurance Plans reimburses many expenses like surgeon’s fees, doctors’ fees, in- house treatments, hospitalization, fees for surgeries, advanced treatments, injuries, etc. Health insurance plan guards the insured by cashless hospitalization at a network hospital and also compensate the cost suffered against a premium. Additionally, one can avail of the tax emption under section 80(D) for health insurance policies. To have health insurance from a renowned company with recognized track records is very crucial.

Religare Health Insurance Company Limited is a prominent and established market player in the Health Insurance industry with a hassle-free and cashless facility direct claim settlement. The company has built a strong network of more than 8000 network hospitals across 500 cities in India. The company has one of the highest Claim Settlement Ratio of 94% in 2018. One of the key features of the health plan is No Claim Bonus. We will now understand the concept of No Claim Bonus in detail.

What is No Claim Bonus?

No claim bonus (NCB) in health insurance is extra money which is added in the sum insured for every claim-free year. It is a return or reward that an insurer gives to the policyholder or the insured for nil claims. The company has two types of No claim bonuses which are:

  1. The name itself suggests a monetary benefit in terms of bonus is given to the insured at the time of renewal
  2. Cumulative Benefit:
    This is an annual increase in the Sum Insured when there is no claim in a year. The standard percentage of increase which is followed is 5%.

 No Claim Bonus and its features

  1. Cumulative Bonus:
    The percentage of bonus which is a minimum of 5% gets accumulated in one year which is claim-free. This has a cumulative effect in the subsequent claim-free years and is permitted to accrue for a maximum period of 5 years to 10 years.
  2. Effect on Sum Insured:
    The cumulative bonus can be functional for  3 years to the sum insured which again helps the insured at the time of renewal of the policy within the due date.
  3. Increased Sum Insured:
    Since there is a cumulative effect on the sum insured in case of no claim, hence there is an increase in the sum insured every year which varies between 10%-50%.
  4. Bonus Expiry:
    It is very important for the insured to renew the policy on time. Any miss in renewal will lead to the expiry of the accumulated bonus amount.
  5. Multiple Policies:
    If an insured has two health plans, and the claim is made from one plan, the no claim bonus facility will be applicable for the policy where the claim was not made. 

No Claim Bonus and its advantages

At the beginning of the article, we spoke about Inflation which is a continuous upsurge in the price level of goods and services in any economy over a certain period. The inflation rate is soaring sky high and is about 10%-12% in the present scenario. This increased rate of inflation has majorly affected the cost of medical and hospitalization expenses. And to combat this, a considerable amount of no claim bonus is of great use. We know that one must compare various health insurance policies before applying for the same. No Claim Bonus is one of the critical deciding factors to consider before choosing and buying any health insurance policy.

No Claim Bonus -When it is offered

A No Claim bonus is usually given by the insurer at the time of the renewal; however, Insurers also offer No Claim bonus throughout the polity term as well. There is a rise in the sum insured through bonus which has a cumulative effect. Religare Health Insurance provides a No Claim Bonus of 10% to the sum insured, however, subject to a maximum No Claim Bonus of 50% in 5 consecutive years. A No Claim Bonus is applicable under the following conditions:

  1. The No Claim Bonus turns into a discount factor on the amount of premium, provided policy is renewed within 30 days of the renewal date.
  2. In case, there is a low-value claim made by the policyholder, a portion of the total sum that is being set aside for the bonus is subtracted proportionally to the entire size of the claim.
  3. The policyholder can get a rebate on the premium if he has a record of the low claim made.
  4. In case, an insured wants to move on to another health insurance company, then the accrued no claim bonus also gets moved along with the policy. This gives total flexibility to the insured to move from one health insurance company to the other.

Effect on No Claim Bonus in case of any claim

We will see an example below here to understand clearly what happens when there is a claim and how it affects the sum insured.

Mr Bose has bought a health insurance policy with Rs 1 lakh as the sum insured and the rate of rising in the sum due to no claim bonus is 10%. Mr Bose has maintained himself and his family well and he has not made any claims for 10 consecutive years. This has resulted in having an extra amount of 

Rs 10000 per year and in 10 years and the amount stands at Rs 100000. The sum insured will be finally Rs 200000. Mr Bose claimed on 11th year, the sum insured will be reduced by 10% of Rs 200000 and will be deducted from the sum insured and hence the new sum insured will be Rs 180000. Therefore, Mr Bose loses out by that amount.

From the above discussion, we can conclude that No Claim Bonus is a very important aspect that needs to be considered before applying for any health insurance plans.

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