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The outbreak of the Covid-19 pandemic has upended the lives of many, exposing them to health and financial risks. The insurance regulator and industry have helped ease the policyholders’ financial burden by offering extension in premium payment, introducing Covid-19 policies, and more importantly, continuing cumulative bonus benefits.
Cumulative bonus or no claim bonus (NCB) in a health policy is a reward that policyholders receive from the insurer for staying healthy and not making any claim on his/her policy in a year. The reward is in the form of increase in sum insured of the policyholder without additional increase in premium amount. Almost all the health insurers, including Aditya Birla Health, Manipal Cigna, HDFC Ergo, ICICI Lombard and new-age players such as Digit Insurance, offer cumulative bonus features.
Recently, some insurers such as HDFC Ergo and ICICI Lombard have offered to continue the benefit of NCB even if a Covid-19 related claim has been made by the policyholders.
No impact on NCB
Normally, if a policyholder has continuously renewed a health policy without a break and made no claim during the year, then the next year, the insurer increases the sum insured (SI) of the policyholder by a certain percentage up to a maximum limit. For instance, you have a policy for ₹10 lakh, with NCB of 10 per cent every year. If no claims are made in three years, then you will have Rs 13 lakh as your SI (₹3 lakh as NCB).
If you make any claim, then your NCB usually reduces in the same proportion. In the above example, after a claim your NCB would be ₹2 lakh in the next year.
With the increase in infections due to Covid-19 and keeping the health risks and medical expenses in mind, some insurers offer financial relief to their policyholders in terms of NCB.
According to Ravi Vishwanath, President, Accident & Health, HDFC ERGO General Insurance, “Any claim made and settled by HDFC ERGO from July 1 to September 30 for the treatment of Covid-19 will not impact or reduce the Cumulative Bonus which the policyholder is eligible.”
Similarly, ICICI Lombard too offered to continue the NCB even in the event of Covid-19 related claim. Also, additional sum insured accrued in the policy will not be impacted, if the insured is hospitalised due to Covid-19. This benefit is available in ICICI Lombard’s complete health insurance policy and health booster plans.
But there are products in the market which have no impact on NCB irrespective of the number of claims filed. For instance, in Manipal Cigna’s ProHealth plan, there is a guaranteed increase in SI of 5 per cent or 10 per cent per year (depending on the plan variant) up to a maximum of 200 per cent of SI. In case of a claim, the NCB in the policy remains the same for next year as well.
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