Cumulative Bonus is the benefit offered by insurers to the policyholders for claim-free years. In this benefit, you get an increase in the % of the sum insured for every no-claim year. It is also referred to as NCB in Health insurance.
A cumulative bonus in health insurance is a reward offered by insurers to policyholders who do not make any claims during a policy year. It is a way of recognising responsible policy usage and encouraging continuity. This bonus typically increases your sum insured at renewal without any premium increase. In some cases, instead of increasing coverage, insurers may offer a discount on the renewal premium. A cumulative bonus is also commonly known as a No Claim Bonus (NCB) in health insurance.
What is a Cumulative Bonus in Health Insurance?
A cumulative bonus refers to the additional benefit provided by insurers for every claim-free year. When you renew your policy without having made a claim in the previous year, the insurer rewards you by increasing your coverage. This increase is usually calculated as a percentage of your base sum insured and is added at renewal. Over time, this allows policyholders to enjoy higher coverage without paying extra premiums, making it a valuable long-term benefit.
How Does Cumulative Bonus Work in Health Insurance?
The cumulative bonus works on a simple principle: the longer you go without making a claim, the higher your coverage becomes. Here’s a simple example:
Suppose your base sum insured is ₹5 lakh. Your policy offers a 10% cumulative bonus for every claim-free year.
Year 1
Year 2
No claim ⇒ Sum insured increases to ₹5.5 lakh
No claim ⇒ Sum insured increases to ₹6 lakh
And so on, until it reaches the maximum limit defined in your policy (for example, up to 50% or 100% of the base sum insured). However, if you make a claim, then the bonus may be reduced or reset, depending on the insurer’s terms.
Key things to remember
Bonus is policy-specific (percentage and limits vary by insurer)
It applies only to claim-free renewals
It can significantly enhance your coverage over time
It does not increase your premium in most cases
Types of Cumulative Bonus in Health Insurance
Cumulative bonuses can be offered in different forms depending on the insurer. While the purpose remains the same, the structure, percentage, and limits vary across health insurance plans.
Increase in Sum Insured
Super Cumulative Bonus
Premium Discount Bonus
NCB Protection Benefit
The most common type, where the sum insured increases by a fixed percentage for every claim-free year, without raising the premium.
An enhanced version offering a higher increase in coverage, sometimes retaining the bonus even after minor claims.
Instead of increasing coverage, insurers offer a discount on the renewal premium for claim-free years.
An add-on or feature that ensures your accumulated bonus is not reduced even if you make a claim.
Features of Cumulative Bonus in Health Insurance
Eligibility
Benefit Type
Cost Impact
Calculation
Accumulation
Limit
Impact of Claim
Applicability
Variation
Claim-free policy year
Increase in sum insured or premium discount
No additional premium (in most cases)
Percentage of base sum insured
Increases with each claim-free renewal
Capped at a maximum percentage (as per policy)
May reduce or reset bonus
Added at the time of policy renewal
Depends on insurer and policy terms
What Happens to the Cumulative Bonus if You File a Claim?
If you file a claim, the accumulated cumulative bonus may be reduced or reset, depending on the policy terms. In some plans, the bonus decreases step-by-step, while in others it may drop to zero. However, policies with NCB protection may allow you to retain the bonus even after a claim.
Difference Between Cumulative Bonus and No Claim Bonus
In health insurance, cumulative bonus and no-claim bonus (NCB) generally refer to the same concept - a reward given to policyholders for maintaining a claim-free record.
Both terms describe benefits offered at renewal, typically in the form of an increase in sum insured or a premium discount. However, the exact structure, percentage, and conditions of this reward may vary across insurers and policy types.
Role of Cumulative Bonus in Health Insurance
Cumulative bonus plays an important role in enhancing the overall value of a health insurance policy. By rewarding claim-free years, it helps policyholders gradually increase their coverage without increasing the premium. Over time, this added coverage can provide stronger financial protection against rising medical costs, making the cumulative bonus a valuable long-term benefit in health insurance.
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Disclaimer: * Savings are based on the maximum discount provided on own damage premium as offered by our health insurer partners.
FAQs on Cumulative Bonus in Health Insurance
What is the cumulative bonus in health insurance?
A cumulative bonus is a reward given for claim-free years, usually as an increase in sum insured or a premium discount at renewal.
How is the cumulative bonus calculated in health insurance?
It is typically calculated as a fixed percentage of the base sum insured and added for every claim-free year.
What is the maximum cumulative bonus allowed in health insurance?
The maximum limit varies by insurer, commonly ranging between 50% to 100% (or more) of the base sum insured.
Can a cumulative bonus be transferred when switching health insurers?
Yes, under portability guidelines, the accumulated bonus can be transferred to the new insurer, subject to their terms.
Does cumulative bonus apply to family floater plans?
Yes, it applies to the overall sum insured of the floater plan, benefiting all covered members.
Do all health insurance policies offer cumulative bonus benefits?
No, not all policies offer it. The availability and structure depend on the insurer and specific plan.
What happens to cumulative bonus if a policy lapses?
If the policy lapses, the accumulated bonus is usually lost unless the policy is renewed within the grace period.
Can cumulative bonus be used for all treatments?
Yes, it increases the total sum insured, which can be used for any covered treatment under the policy terms.
Is a cumulative bonus available for add-on covers in health insurance?
Generally, a cumulative bonus applies to the base policy and not to add-ons, unless explicitly mentioned.
How to maximise cumulative bonus in health insurance?
By maintaining a claim-free record, renewing the policy on time, and choosing plans with higher bonus limits or NCB protection features.
