Did You Know Your Sum Insured Increases For Every Claim-Free Year?

You may be considering purchasing health insurance. You consider, “Wait a minute, what happens if I don’t claim at all” while making your decision.

You could be concerned that your premium payments would be wasted. What if we told you that you could also be rewarded for maintaining good health, that is, for not filing any claims?

Many insurance policies come with a cumulative bonus feature that rewards policyholders with an increase in the sum insured for every claim-free year. This benefit can significantly enhance one’s insurance coverage over time. Let’s explore this feature in more detail.

Yes, a bonus is what we’re discussing. This is referred to as a “cumulative bonus” in the insurance industry. Read on to find out more about this.

How Do Cumulative Bonuses Work?

In the context of health insurance, a cumulative bonus is a financial benefit you receive for one policy year of no claims.

However, the benefits you receive vary depending on the health insurance. Some insurers will give you a concession on your premium for the policy year that follows, while others will add a sum covered to your health insurance without increasing your price.

Most insurance companies typically increase the sum insured by 5% to 50% for each year without a claim.*

Let’s use an illustration to clarify this:

Consider that you have a health insurance policy with a coverage limit of Rs. 10 lakhs. If you don’t file any claims within the first year of your policy, you can receive a 50% boost, bringing your insured amount to Rs. 15 lakhs.

Additionally, if you maintain a claim-free record for a second year, your total growth in Sum Insured will rise to 20 lakhs, which is a 100% increase from where you started!

Health Insurance Benefits of Cumulative Bonus

Let us take a look at the health insurance benefits:

  • Either your premium will be less, or additional money will be included in your covered total.
  • By receiving extra coverage at the same price during renewal, you can save money. ##
  • For a maximum of 10 years under some programs, you can keep accruing your cumulative bonus.
  • If your hospital expenditures are small, you may decide to take care of them independently and maximise the cumulative bonus. *

Always renew your health insurance plan on time to avoid losing the cumulative bonus. After all, it is a benefit for maintaining good health.

It is essential to understand that many insurance policies offer a cumulative bonus feature that increases the sum insured for every claim-free year. This provision significantly incentivises policyholders to maintain a healthy health insurance claim record and can significantly enhance their coverage over time. Therefore, it is crucial to check your policy’s terms and conditions to know if you are eligible for this benefit and take advantage of it to maximise your insurance coverage for yourself and your family.

* Standard T&C Apply

## All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply.

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.

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