Cumulative/No-Claim Bonus

The insurer may offer you extra protection beyond the sum insured if you can prove to them that you’re keeping healthy. And they do this by extending a no-claim bonus i.e. If you don’t make a claim in any given year, then the insurance company may offer a bonus (say a 50% bump on the total cover) every year on renewal. They’ll do this until the total coverage breaches a certain threshold. For instance, 100% of the original sum is insured.

No Claim Bonus is cumulative, which means that it increases every year that the policyholder does not make a claim. For example, if a policyholder does not make a claim in the first year of their policy, they may receive a 10% discount on their premium in the second year. If they do not make a claim in the second year, they may receive a 20% discount on their premium in the third year, and so on.

In addition to providing a discount on the premium, some insurance companies may also offer other benefits as part of the NCB. For example, they may offer free health check-ups, coverage for pre-existing conditions, or waiver of waiting periods.

For more details check out article on No Claim Bonus