No Claim Bonus Myths Busted: What’s True & What’s Not?

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If you’ve come across the term No Claim Bonus in health insurance, you might have questions. Perhaps someone explained to you that if you make a minor claim, it vanishes. Perhaps you believe it’s an insurance company trick.

Let’s cut through myths and facts the simplest way possible. No hard words. No dull explanations. Only straight answers!

What is No Claim Bonus (NCB)?

Suppose you have medical insurance and do not file any claims in a year. That means the insurance firm did not have to pay you anything during that year.

As a token of appreciation, they reward you with something called a No Claim Bonus. This is a reward for being healthy and not filing any claims.

There are two kinds of NCB:

Discount on next year’s premium
Increase in your sum insured (the cover amount that your insurance provides)

Yes, it sounds good. Now let’s check out the popular myths and what really holds true.

Myth 1: If I make even a single claim, I forfeit my No Claim Bonus.

Truth: Not necessarily.

Some insurers slash the bonus post a claim, but don’t entirely cancel it.

And most schemes have partial claims without forfeiting your entire bonus.

Tip: Always refer to your policy. Some policies are very generous!

Myth 2: No Claim Bonus = more money in my pocket.

Truth: Not quite.

NCB doesn’t equate to the insurance company paying you cash.

It means that you pay less next year, or the amount you are covered for rises.

So, you won’t receive money in your bank account. But you do save money or receive more cover.

Myth 3: NCB continues to increase indefinitely.

Truth: There’s a limit.

Most health insurance policies add your coverage by a percentage every claim-free year. But there is generally a maximum limit, such as 50% or 100% of your initial sum insured.

So yes, NCB does aid you in increasing your coverage, but not indefinitely.