No Claim Bonus (NCB) in Health Insurance: What It Means and How to Use It in 2025

Health insurance continues to be one of the smartest financial tools for individuals and families. But it’s also a product you hope you never really need. After all, if you stay healthy, you don’t make any claims. That’s where the No Claim Bonus (NCB) comes into play. It’s a benefit given to policyholders who don’t raise any claims during the policy year, and over time, it can make a real difference to your coverage or premiums. It’s a win-win because customers who avoid claims get rewarded, and insurance companies save on costs of processing claims. But while it might sound good, it’s really important to understand how NCB works, what its limits are, and what’s new about it in 2025. Let’s break it down.

What Is No Claim Bonus (NCB)?

The No Claim Bonus is a reward that your health insurance company gives you when you don’t make any claims during the policy term. Think of it as a way of the insurer thanking you for staying healthy and not using your insurance unnecessarily.

There are two main types:

Cumulative Bonus

This is the most common. Each year that you don’t make a claim, your sum insured increases—usually by 5% to 50%—up to a fixed cap. For example, a ₹5 lakh policy could grow to ₹7.5 lakh over five claim-free years if the cumulative bonus is 10% annually.

Premium Discount

Instead of increasing your coverage, some plans offer a discount on your next renewal premium if you didn’t claim during the year. It’s less common than cumulative bonus, but great for keeping your premiums low.

Benefits of No Claim Bonus

• Higher Coverage Without Higher Premium: Your sum insured goes up without you having to pay more. In a world where hospitalization costs are rising, that added cushion helps a lot.
• Saves Money for You and the Insurer: You save on premiums and get better coverage. The insurer benefits from fewer claims to process—so in a way, NCB reduces costs for both parties.
• Encourages a Healthy Lifestyle: Knowing that staying healthy helps you earn rewards can be motivating. While the bonus isn’t huge, it’s a nice psychological nudge in the right direction.
• Transferable Between Insurers: If you switch insurance companies, you don’t lose your NCB. This keeps competition fair and ensures you’re not stuck with one insurer just to retain your rewards.

Limitations of No Claim Bonus

• There’s a Cap: Most cumulative bonuses are capped at 50% or 100% of your base sum insured. So even after many claim-free years, your bonus won’t grow endlessly.
• You Can Lose It: If you make even a single claim, the bonus could be reduced or wiped out, depending on the policy terms.
• Not All Plans Offer It: Some insurers don’t offer NCB at all, or offer it only on specific plans. You’ll need to check the fine print.
• What’s New with NCB in 2025? Health insurance providers have started introducing smarter and more flexible NCB options. Here are a few new trends:
• NCB Protect Riders: Some companies now let you keep your bonus even if you make a claim. For example, Care Health Insurance’s NCB Super allows your bonus to grow 50% each claim-free year and only reduces it if you claim—without dropping below the original base sum insured.
• Guaranteed Bonuses: HDFC ERGO’s Optima Secure gives a 50% increase in your sum insured each year regardless of claims. This means you could double your coverage in just two years—even if you use your policy.
• Higher Caps on Bonus: Newer plans offer 25% increases per year, up to 50% total bonus in just two claim-free years. That’s a faster boost than what was available earlier.

How to Make the Most of NCB

• Renew On Time: Missing your policy renewal can erase your NCB. Set reminders and renew before the due date.
• Add NCB Riders: When buying or renewing a policy, check for riders that protect your bonus even if you file a claim.
• Compare Policies: Different insurers offer different NCB terms. Some cap it low, others offer lifetime protection. Always compare before choosing.
• Be Smart About Small Claims: If you can afford to pay a small medical bill out-of-pocket, consider doing so to preserve your NCB for more serious expenses in the future.

Final Thoughts

No Claim Bonus is a great feature in health insurance, especially for people who don’t often need to use their policy. It encourages good health habits, gives you better value for money, and adds long-term benefits to your plan. But like everything in insurance, the devil is in the details. Knowing how NCB works—its pros, cons, and how it’s evolving—can help you make smarter choices and get the most out of your health insurance in 2025 and beyond.