When you buy a mediclaim policy, you purchase peace of mind. Medical emergencies can strike anyone without any notice. With increasing costs of medical treatments, such emergencies can break your bank. If you have a mediclaim policy, then the insurance provider takes care of the treatment and hospitalisation costs. To offer this coverage, the insurer charges a small premium.
But what happens if you don’t face a medical emergency in a year? What happens if you don’t file a single claim on your mediclaim policy for many subsequent years? Is the entire premium paid lost? Not completely. Not many people are aware that subsequent claim-free years can help you increase the sum assured in mediclaim at no extra cost. In addition, here lies the answer to the question — how to increase mediclaim policy? Let’s discuss.
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Workings of a Mediclaim Policy
Here is a simple way to understand how a mediclaim policy works:
- You apply for a mediclaim policy
- The insurer assesses your medical condition and history
- The insurer considers a range of factors and offers coverage for a fixed term at a fixed premium
- The premium is calculated based on the probability that you will file a claim during the year
- When you file a claim, the insurer covers the cost of treatment and/or hospitalisation
- If you don’t file a claim during a policy term, the premium paid is the insurer’s earning
However, if you do not file a claim during a year, the insurer starts looking at you as a low-risk policyholder. Hence, he offers certain benefits to you under the No Claims Bonus category.
What is a No Claims Bonus?
No Claims Bonus or NCB is a set of benefits offered by insurance companies to policyholders who do not file a single claim in a policy term. Usually, the benefits increase for every subsequent claim-free term. Insurers offer these benefits to dissuade people from filing a claim for every small expense.
Benefits Offered Under NCB
There are two types of benefits offered by insurers under NCB:
- Discount on Premium: If you have not filed a single claim during a policy term and want to renew it, the insurer offers a discount on the premium for the renewal. This is a popular NCB benefit that allows you to get the same sum assured for a lower premium. It is a progressive deposit that increases with every subsequent policy term that you do not file a claim.
- Higher Sum Assured: Some insurers do not offer a discount on premiums as NCB benefits but increase the mediclaim policy sum assured. This is also a progressive bonus that increases with every subsequent claim-free year. So, if you have not filed a claim during a policy term and your sum assured is ₹20 lakhs, then on renewal, the insurer might increase it to ₹22 lakhs for the same premium (indicative numbers).
What is the Rate of Increase of the Sum Assured Under NCB?
This depends on the insurer. Most insurance providers offer details about their NCB bonus on their websites and policy documents. Hence, before buying a policy, you can go through the details to get a better understanding of the benefits you can expect for claim-free years.
Remember, a claim-free year is a win-win proposition for everyone.
- As a policyholder, you manage to get through one year without any medical emergencies. This is a good sign that indicates that you have a healthy lifestyle.
- The insurer does not have to bear the expenses of medical treatment.
- The policyholder gets a discount on the premium or a higher sum assured for the same premium.
Summing Up
When you decide to buy a mediclaim policy, make sure you compare health insurance plans and look at the benefits offered by the insurer for claim-free years. Policyholders that do not file a claim are preferred by insurers because they do not have to bear the costs of treatment. Make sure that you research your options and compare plans and providers to find the best health insurance policy for your needs. Good Luck!
