No Claim Bonus in Health Insurance: Save 50% on Premium Legally (2025 Guide)

What is No Claim Bonus (NCB) in Health Insurance?

No Claim Bonus (NCB) is a reward given by insurance companies when you don’t make any claims during a policy year. In health insurance this usually appears as either a discount on the renewal premium or an increase in sum insured — depending on the insurer and the product terms.

Think of it like a loyalty bonus: if you maintain a claim-free year, the insurer says “thank you” by making your next policy slightly cheaper or more valuable. This is especially useful for families who rarely need hospitalisation but want growing cover without huge premium hikes.

NCB versus No-Claim Bonus in Motor Insurance — What’s different?

People often confuse NCB rules across product lines. In motor insurance NCB is usually a straight discount on premium and is transferable. In health insurance, the mechanics vary more:

• Increase in Sum Insured: Some insurers increase your sum insured by a percentage (e.g., 10%) for being claim-free.
• Discount on Renewal Premium: Others offer a small discount on the renewal premium.
• One-time Benefit: Few products offer a one-time lump-sum benefit usable as cashless cover.

Always read your policy wordings — the precise NCB rules live in the ‘benefits’ or ‘renewal’ sections.

How Does NCB Work? — Step-by-step

1. Buy a policy: You purchase a health insurance policy (individual or family floater).
2. Keep it claim-free for a year: If you don’t file any hospitalisation claims during the policy year, you become eligible for NCB at renewal.
3. NCB applied at renewal: On renewal, the insurer either increases your sum insured by a fixed percentage or gives a discount on premium (or both, depending on product).
4. NCB accumulates: Some insurers allow NCB to stack for multiple consecutive claim-free years, meaning bigger benefit the longer you remain claim-free.
5. NCB may be lost on claim: Filing certain types of claims (like large hospitalisation claims) may reduce or reset your NCB to zero—check the policy wording on how partial claims affect NCB.

Common NCB Examples (Simplified)

Insurance companies use various formulas. Here are simplified examples:

• Example A (Increase in Sum Insured): Sum insured ₹3,00,000. After 1 claim-free year, insurer adds 10% — new sum insured ₹3,30,000 at renewal.
• Example B (Discount on Renewal): Renewal premium ₹12,000. Insurer gives 5% NCB — you pay ₹11,400 at renewal.

Tip: Even a 5–10% saving or a 10% bump in sum insured compounds over years — smart for low-claim families.

Does NCB Apply to Family Floater Policies?

Yes, most insurers apply NCB for family floater policies as well, but the application rules differ:

• Some insurers increase the family floater sum insured as a whole for being claim-free.
• Others apply NCB based on the primary insured member’s claim history.

If you have many dependents, read whether NCB is shared across the floater or calculated per family member.

When Do You Lose NCB?

NCB rules are strict: a single claim can affect it. Typical reasons NCB is reduced or lost include:

• Any cashless hospitalisation claim during the policy year.
• Claims for pre-existing conditions during waiting period (in some policies).
• Policy lapses — not renewing on time often resets NCB to zero.

Important: A small outpatient or OPD claim may not be covered by the main health policy (and therefore won’t affect NCB). But hospitalisation or daycare procedure claims usually will.

How to Protect & Maximise Your NCB — Practical Tips

NCB is a passive benefit but you can protect it with smart actions:

1. Renew on time: Avoid policy lapses. Even a short break may reset NCB.
2. Choose the right product: Some policies offer stacking NCB — prioritise products that build NCB over years.
3. Use super top-up plans: If you’re worried about rare large claims, combine a base policy with a super top-up. Small claims go to base policy and may affect NCB — so structure wisely.
4. Buy higher waiting period coverage: For pre-existing illnesses, accept longer waiting periods to reduce claims and protect NCB.
5. Consider separate critical illness cover: If you worry about one-time big payouts, a separate critical illness policy avoids touching health NCB for routine hospitalisations covered under the base policy.
6. Maintain good health: Preventive care lowers the chance you’ll need hospitalisation.

Should You Avoid Small Claims to Save NCB?

This is a common dilemma. Sometimes policyholders avoid small claims to keep NCB intact — but it’s not always the right move.

Consider:

• Claim size & impact: If a claim is small compared to the loss of NCB value, claim it. Example: if a ₹10,000 medical bill pushes you to lose a cumulative NCB worth ₹30,000 over years, filing may be wiser.
• Future risk: If you have higher risk of a large claim soon (planned surgery), you might prefer to preserve NCB now and use emergency savings for small bills.
• Insurer specifics: Different insurers treat partial claims differently; read your policy or ask the insurer’s care team.

In short: weigh immediate financial relief against long-term benefit — there’s no one-size-fits-all answer.

How to Check NCB on Your Policy

To verify your current NCB status:

1. Log in to your insurer’s customer portal (many insurers show NCB in the policy dashboard).
2. Check the renewal notice or premium schedule — NCB-related discounts and sum-insured increases appear there.
3. Call insurer customer support or your broker/agent and ask for the NCB record.

We also recommend saving renewal documents each year so you can track the NCB build-up over time.

Where to Find Official Rules & Examples

For updated product rules and industry guidance, check trustable sources like:

• Insurance Regulatory and Development Authority of India (IRDAI) — for regulations and circulars.
• PolicyBazaar — product comparisons and NCB examples.

Internal Resources (ClaimWeb)

Related guides on ClaimWeb (useful to link internally):

• Life Insurance — Complete Guide
• Health Insurance — Beginner’s Guide
• Health Insurance Govt Schemes

NCB & Portability — What Happens if You Switch Insurers?

Most insurers allow portability of the base sum insured and include claims history, but NCB portability depends on company rules.

• When porting, insurers usually consider your claim-free years to decide NCB treatment.
• Some insurers may reset NCB while others may offer a like-for-like continuation — confirm before porting.

Sample Renewal Checklist (Quick)

• Check NCB status on your insurer portal.
• Compare at least 2–3 quotes (don’t auto-renew blindly).
• Confirm internal linking of family members in floater policies.
• Decide whether to add a top-up or separate cover.
• Renew before the expiry date to preserve NCB.

Frequently Asked Questions (FAQ)