Did You Know Your Health Insurance Sum Insured Increases For Claim-Free Years?

The recent events have made health insurance more than a recommended investment to a must-have one. You never know an unknown health contingency might strike and leave you by a storm, not only mentally but also financially. To avoid these unexpected and untimely contingencies, it is essential you have a safety net in place; safety-net in the form of a health insurance policy. 

A health insurance policy helps ensure that you and your family have a financial safeguard to manage the unforeseen medical emergencies. But it isn’t always that you make a claim. So what next? Does your premium go waste? No, fret-not! Health insurance companies have you covered by offering a cumulative bonus. 

Understanding cumulative bonus in health insurance

Cumulative bonus, also known as a no-claim benefit is a monetary benefit that your insurer passes on for not making any claims during the previous policy tenure. To provide a reference, it is akin to the concept of no-claim bonus in motor insurance. But instead of lowering the premium at renewal like motor insurance, the sum assured increases to provide enhanced coverage for your health insurance policy. 

Is there capping at the maximum limit of cumulative bonus?

Unlike the no-claim bonus, cumulative bonus differs among each insurance company and for its various plans. For example, an individual policy may have a different cumulative bonus than a critical illness insurance cover. In some cases, the cumulative bonus can be as high as 50% of the sum insured amount. A point to note is that there isn’t a flat percentage of bonus but instead increases steadily for consecutive policy years without claims. 

What happens to the cumulative bonus if you make a claim?

Generally, if you make a claim during the policy tenure, your sum insured is reinstated but in some cases, it differs. If the claim is for a small amount, some insurance companies slim down your cumulative bonus. The treatment of cumulative bonus differs among the insurance companies and thus you should read the policy document to understand its impact on your sum assured and cumulative bonus. 

Can you transfer your cumulative bonus like your policy?

Since the regulator allows porting your health insurance policy to a different insurance company, the same is possible for accrued policy benefits like the cumulative bonus. Although the transferability has its own set of terms and conditions. Switching different plans with the same insurer may allow you to transfer entire cumulative benefits whereas among different insurance companies may place a few restrictions. To have a detailed understanding, it is essential you read the policy documents carefully and not lose on your accrued benefits. 

Cumulative bonus is one of the important factors when purchasing a health insurance policy. So, make sure you compare the various plans and ensure your policy has a cumulative bonus feature. While comparing, health insurance premium calculator is a nifty tool that can help aid the selection process and help you decide on the necessary add-on riders for your policy. All of this while keeping your premiums in check. Thus, make the most of your health policy while you enjoy a safety net from your insurance company.

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