Health insurance is critical to be prepared for unexpected medical emergencies. It offers financial coverage and alleviates mental stress at such times. But these medical exigencies are not an everyday occurrence. They are a one-off event with substantial magnitude to disrupt your finances. Hence, staying insured and ensuring continued coverage using health insurance plans is advisable.
You may ponder the times when no claims are made with the insurance company. Does your insurance premium go to waste? Well, not entirely. The insurance company offers some renewal benefits when policyholders make no claims. Thus, you need not worry if the premium is wasted. Instead, you accrue certain advantages in the form of a cumulative bonus. Let’s look at what are the benefits that passed on to the insurance company at renewal:
What is the cumulative bonus?
A cumulative bonus is the renewal benefit insurance companies award for raising no claims during a policy tenure. This benefit is awarded at renewal, which increases the sum insured by health insurance policies. Generally, such an increase of the sum assured is up to 50% of the original policy coverage but gradually with each claim-free policy period. However, the increased range is up to a specified amount per the policy terms. * Standard T&C Apply
Things to know about the cumulative benefit of health insurance
When buying health insurance in India, there are some pointers you must keep in mind about cumulative bonus:
#1 Premiums remain constant
When the insurance company offers cumulative benefits, increasing the sum assured of your policy, the premiums do not change. Although the coverage rises significantly, the insurance company passes the rewards without additional charges at health insurance renewal. Although the premium remains the same, the enhanced coverage comes in handy to tackle the unexpected cost of medical treatments that increase with soaring inflation.
#2 Limitation on the amount of increase through cumulative benefits
Although a cumulative bonus increases the sum assured of your health insurance policy, it is limited to a specified amount. This increase may be capped at 100% or 50% depending on the policy terms. However, it is advisable for you to thoroughly verify the terms that mention the maximum increase through a cumulative bonus. For instance, a policy of ₹8 lakhs caps the increase in sum assured at 50%, and the cumulative bonus offered will be a maximum of ₹4 lakhs and not beyond it even if no claims are made. * Standard T&C Apply
#3 Cumulative benefits are applicable for individuals as well as family floater plans
Individual policies are the most common health insurance coverage that is opted for. With these plans, leading insurance companies offer a cumulative bonus. But a family floater plan is handy when you have more than one beneficiary to cover. The incremental bonus benefits apply to individual projects and extend to family covers.
#4 All policies may not offer this feature
While you shop for health insurance coverage, make sure to check if your insurer provides the facility of a cumulative bonus since not all insurers do. And if they do, you must be informed of the compensation amount and other terms concerning it.
These are some of the benefits offered by health insurance companies. When selecting a policy, you can use a health insurance premium calculator to determine the impact of such features on your premium.
Also, note that insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
