No Claim Bonus – A Health Insurance Hack you must know about

By Sakshi Srivastava - 02 Jul 2021 Last Updated: 29 Nov 2021
No Claim Bonus – A Health Insurance Hack you must know about

With the rising cost of medical services, it is more important than ever to choose an affordable health insurance policy to cover medical bills. With health insurance, you not only get coverage for all of your medical bills, but you also get a reward for going a year without filing a claim in the form of NCB, or No Claim Bonus. As a result, having sufficient awareness of the numerous elements that control these covers is essential while applying for health insurance in the UAE. Without further ado, let's understand what are No Claims Bonus and there other related aspects.

What is No Claims Bonus in Health Insurance?

A no-claim bonus is a fantastic perk that a health insurance policyholder can take advantage of. In health insurance, a no-claim bonus, or NCB, is money added to the total insured for each year without a claim. It's similar to an incentive given to a policyholder for not filing a claim on his health insurance.

What are the different types of No Claim Bonuses in Health Insurance?

The no-claim bonus in health insurance operates in two ways: I

  • Cumulative bonus
  • Premium discount

Let's have a look at each one.

Cumulative Bonus

When your coverage amount is increased but your premium remains the same after a claim-free year, it is referred to as a cumulative no claim bonus.

For example, suppose you had AED 500,000 health insurance coverage with a 5% no-claim incentive for each year without a claim. If you haven't made any health insurance claims in the first year, your coverage amount will increase to AED 525,000 for the same price. Similarly, if you go two years without filing a claim, your coverage amount would be AED 550,000 and so on. That means that if you need to be hospitalized in the third year, you can claim up to AED 550,000.

Premium Discount

In the case of a premium discount for no claim bonus, the premium price decreases by a particular percentage for each claim-free year, while the coverage level remains the same.

Assume you have a AED 500,000 health insurance coverage for which you pay a AED 10,000 annual premium. For each claim-free year, your insurer now offers a 5% discount on your rate as a no claim incentive. If you do not make a health insurance claim in the first year, you will be charged AED 9,500 at the time of policy renewal. However, the amount of coverage would remain the same. The cumulative no claim incentive, on the other hand, is significantly more popular and is offered by many insurers.

What is the relationship between the No Claim Bonus and health insurance?

A no claim bonus, or NCB, is a bonus cover given to a health insurance plan for each claim-free year in the amount of the promised amount offered by the insurance provider to the insured.

This refers to a bonus offered to policyholders who stay in excellent health and do not file a claim during the insurance year. This is a fantastic benefit that health plan subscribers can take advantage of. Under the NCB, policyholders can earn accumulated benefits, which increases the amount guaranteed for each claim-free policy year by a specified percentage.

How does No Claims Bonus operates?

The ultimate goal of health insurance policies is to give financial security to a family by settling or repaying hospital expenses through a cashless benefit from a medical health plan claim. Policyholders may not always need to submit a claim request. It's possible that they were able to avoid paying medical bills since they were able to stay healthy. As a result, individuals are entitled for NCB under health policies in this case.

What will happen to the No Claims Bonus if the health insurance plan isn't renewed?

Each health plan has a specific duration. There is a one-time premium option for those plans that are available for a longer period of time. This can take the pressure off of having to renew insurance plans on time. The insurance will expire if the policyholders are unable to extend it until the expiration date.

The policyholders would not be granted the facility that comes with the extension of the insurance plan in this case. This assures that if the insurance policy is not extended on time, the accrued amount of coverage under the NCB will not be available to policyholders.

Benefits of a No-Claim Bonus

If you're thinking about getting a health plan and aren't sure if you should get a no-claim incentive or not, have a look at the characteristics listed below before making a decision.

Benefits of a No-Claim Bonus

The above mentioned are explained for a better understanding-

FINANCIAL SUPPORT SYSTEM

A no-claim bonus implies more coverage for you and/or your family, as well as a financial cushion. It safeguards you in the event of a financial catastrophe or a medical emergency.

MAXIMUM PROTECTION

No claim bonus assures maximum coverage because the total insured will never be less than the original value, regardless of how many claims you file. You'll be able to make claims on both your basic and NCB amounts.

THE INSURED AMOUNT INCREASES           

Healthcare prices are rising every day, and you'll need enough cash on hand to keep up with them. A no-claim bonus would be a benefit on top of your sum covered, allowing you to save a lot of money. By attaining one or more claim-free years, you can obtain a bigger sum insured.

NO CLAIMS BONUS CAN BE TRANSFERRED

During the portability of your insurance policy, you can easily transfer your no-claim incentive. To put it another way, if you move insurance companies, all of your no-claim bonus points will be transferred to your new plan.

INCENTIVES FOR MAINTAINING A HEALTHY LIFESTYLE

All policyholders are eligible for a no-claim incentive, which encourages them to stay healthy so that they can accrue more claim-free years.

Is the No Claim Bonus applicable to both individual and floater health insurance policies?

Individual health plans are policies that exclusively cover the policyholder, whereas floater policies cover the entire family. If you have an individual policy and do not make any health insurance claims throughout the year, you will not be eligible for a claim bonus. Similarly, if no member covered by a floater policy makes a health insurance claim for the entire year, they will receive a no claim bonus the following year.

Floater Health Insurance Policy-

A family floater is a type of health insurance that covers the complete family rather than just one person. Simply described, a floater is an umbrella that covers all members of the family. Every family member benefits from a larger common pool when they are covered by a floater.

At what instance is No Claims Bonus provided in a Health Insurance?

NCB is supplied to policyholders through a medical insurance policy if they plan to renew their health plan. Insurance companies are now providing a no-claim benefit for the duration of the policy. The no-claim benefit in a health contract is normally applicable under the terms indicated below.

  • In the case that the insured person makes a claim at a low value, the NCB is not completely ignored.
  • Additionally, if the covered party chooses to change insurance providers, the NCB earned under the previous health plan will be transferred to the new health plan.
  • If the policyholders have a restricted claim history, they will receive a reimbursement for the cost of the health care premium, which must be charged due to the contract's distinctive extra feature.

Not all health insurance policies have a No Claims Bonus

Some health insurance policies do not provide a no-claim benefit. Each health insurance policy that offers a no-claim incentive has its own set of terms and restrictions. So, study the fine print of your health insurance policy to see if it includes a no-claim benefit. What are the terms and conditions if you say yes?

 For instance, what is the percentage of no-claim bonus, how much can the coverage be raised, and so on. One of the most crucial aspects to consider when purchasing health insurance is the no-claim incentive. So, when comparing policies, have a look at the no-claim incentive terms and conditions. Choose the one that best fits your needs. Let's say you have an AED 500,000 individual health insurance coverage that you pay a significant premium for. Then you can choose a policy that offers a premium decrease for no claims incentive.

Conclusion

An NCB in the health insurance plan is one of the main features to keep in mind when choosing a package. Insurance policies that provide significant benefits while enforcing only minor fines on low-cost claims may well serve the goal and prove to be very helpful to the requirements.

The cost of hospitalization and other medical bills has increased dramatically as a result of medical inflation today. In these situations, a no claim bonus is an excellent method to increase your health insurance coverage. So, to get the most out of your health insurance, be fit and healthy. We hope this blog provided you with incite full information. For other related information, feel free to check out our Website.

By Sakshi Srivastava

02-Jul, 2021

Medical Insurance Related FAQ

Frequently Asked Questions

  • Why is it so essential to declare my pre-existing medical conditions?

    Patients are communicated to tell their physicians all about their medical history in order to get the best care, and health insurance policyholders are asked to tell their provider all about their pre-existing conditions in order to get the best coverage. Furthermore, if there are any inconsistencies in the medical insurance policy, the insurance company can cancel the policy.

  • What is the extent of medical insurance coverage in the UAE?

    The regional limit to which a health insurance policy's benefits are available is referred to as the scope of coverage. For example, in the UAE, health insurance with a definition of ‘Within the UAE' would only compensate policyholders for medical services received in the UAE.

  • Are family plans the cheapest health insurance available in the UAE?

    Family policies undeniably deliver some of the best coverage at the most affordable prices, making them one of the most cost-effective health insurance choices in the UAE. Even family health insurance policies, however, have their own limitations, such as a limited number of dependents and other constraints. When applying for a job, it is suggested that applicants spend some time reviewing the different inclusions and exclusions.

  • What are the Medical Insurance Policy for female in UAE?

    Medical insurance Policy for females are expensive because of the pregnancy related costs that occurs to the insurance companies. Whereas policy for female aged below 40 is too expensive compared to female aged above 40.

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