Health insurance is critical to be prepared for unexpected medical emergencies. Not only it offers financial coverage, but also 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, it is advisable to stay insured at times and ensure continued coverage using health insurance plans.
You may ponder about the times when there aren’t any claims made with the insurance company. Does your insurance premium go waste? Well, not entirely. The insurance company offers some renewal benefits when no claims are made by policyholders. Thus, you need not worry if the premium is wasted. Instead, you accrue certain benefits in the form of a cumulative bonus. Let’s look at what are the benefits that passed on the insurance company at renewal:
What is the cumulative bonus?
Cumulative bonus is the renewal benefit that insurance companies award for raising no claims during a policy tenure. This benefit is awarded at the time of renewal which increases the sum insured of health insurance policies. Generally, such an increase of sum assured is up to 50% of the original policy coverage but in a gradual fashion with each claim-free policy period. However, the increased coverage is up to a specified amount as per the policy terms. * Standard T&C Apply
Things to know about the cumulative benefit in health insurance
When buying health insurance in India, there are some of the pointers you must keep in mind about cumulative bonus:
#1 Premiums remain constant
When the insurance company offers cumulative benefit increasing the sum assured of your policy, the premiums do not change. Although the coverage increases by a significant amount, the insurance company passes the rewards without any additional charge at health insurance renewal. Although the premium remains the same, the enhanced coverage comes handy to tackle unexpected cost of medical treatments that go on increasing with soaring inflation.
#2 Limitation on the amount of increase through cumulative benefits
Cumulative bonus, although increases the sum assured of your health insurance policy, it is limited to a specified amount. Depending on the policy terms, this increase may be capped at 100% or 50%. However, it is advisable for you to thoroughly verify the terms that mention the maximum amount of increase by way of cumulative bonus. For instance, a policy of ₹8 lakhs caps the increase in sum assured at 50%, 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 the benefit of cumulative bonus. But when you have more than one beneficiary to cover, a family floater plan comes handy. The cumulative bonus benefits are not only applicable to individual plans, but also extend to such family covers.
#4 All policies may not offer this feature
While you shop for a health insurance cover, make sure to check if your insurer provides the facility of cumulative bonus since not all insurers do. And if they do, you must be clearly informed of the amount of bonus along with other terms concerning it.
These are some of benefits offered by health insurance companies. When selecting a policy, you can make use of 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 sales brochure/policy wording carefully before concluding a sale.