Unraveling the no-claim or cumulative bonus in health insurance plans

cumulative bonus inhealth insurance plans

To incentivize policyholders for maintaining a healthy lifestyle and stay claim-free, the mediclaim policy offers a unique benefit known as the no-claim or cumulative bonus. Health insurance is an invaluable financial safety net that provides coverage for medical expenses during unforeseen illnesses or accidents.

Understanding no-claim or cumulative bonus

The no-claim or cumulative bonus is a reward system designed to encourage policyholders to maintain a healthy lifestyle and stay free from making any claims on their health insurance policies during a specific period. It is essentially a bonus that policyholders receive in the form of an increased sum insured or a reduction in the premium amount for every claim-free year.

How does no-claim or cumulative bonus work?

The mechanism of the no-claim or cumulative bonus is quite straightforward. When you purchase a health insurance policy that offers this benefit, the sum insured or the coverage amount remains constant during the first year of the policy term. However, if you do not make any claims during that year, kotak general insurance rewards you with a bonus. This bonus could be an increase in the sum insured or a discount on the premium amount for the subsequent policy year.

For example, let’s say you have a health insurance policy with a sum insured of ₹5 lakhs and a no-claim bonus of 10%. After the first year of the policy, if you have not made any claims, your sum insured for the second year will increase by 10%, making it ₹5.5 lakhs. If you continue to remain claim-free, the bonus may keep accumulating each year, further increasing your coverage.

Significance for policyholders

  • The primary advantage of the no-claim bonus is that it boosts your health coverage without any additional cost. It provides an incentive for policyholders to maintain good health and stay away from minor claims.
  • A claim-free record reflects a lower risk profile, and insurance companies reward this with reduced premiums. In the case of a cumulative bonus in the form of a premium discount, policyholders get to save on their insurance costs.
  • Policyholders are more likely to invest in preventive care, regular health check-ups and wellness initiatives to avoid making claims. The no-claim bonus serves as a motivator for adopting a healthy lifestyle and proactively managing one’s health.
  • This increased coverage comes in handy during times of medical emergencies or when facing rising healthcare costs. With the no-claim bonus, policyholders can secure higher coverage without having to pay additional premiums.
  • The cumulative bonus provides an incentive for policyholders by rewarding loyalty and adherence to the policy, and we encourage long-term relationships with our customers.

Things to Consider While the No-Claim or Cumulative Bonus

  • If the cap is set at 50%, your sum insured may not increase beyond 1.5 times the original coverage amount.
  • A policy with a lower cumulative bonus but a lower premium might be a better fit for some individuals.
  • Check whether your cumulative bonus is transferable if the policyholder provides adequate proof of the claim-free period.


The No-Claim or Cumulative Bonus is a valuable feature in critical illness insurance plans that rewards policyholders for maintaining a healthy lifestyle and staying claim-free. It offers increased coverage or premium discounts as an incentive for adhering to the policy terms. While it can significantly enhance your health insurance benefits, it is essential to compare different policies and read the terms and conditions carefully before making a decision.

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