Can you tell me what does cumulative bonus means in a health insurance plan?

Can you tell me what does cumulative bonus means in a health insurance plan?

Just like a no claim bonus offered for car insurance, a cumulative bonus is offered for health insurance. The sum insured is increased by a specified percentage for every claim free year. Depending on your health insurance company either you can get an increase in the sum insured or get a discount on the annual premium or at times a combination of both.

The cumulative bonus can mean an increase in the sum assured by as much as 5% and can go as high as 50% of the basic Sum Assured. In case a claim is made, specified percentage of Sum Assured is deducted from the cumulative bonus in the subsequent year. An important point to keep in mind is the fact that your policy should be renewed without a break to be liable for a cumulative bonus.

Hi Sohini,

The No Claim Bonus offered on a Health Insurance policy is usually in the form of a cumulative bonus. This is offered by insurers on indemnity based Health Insurance policies. This is offered to the policy holder under the following situations:
• There is a progressive increase in the Sum Assured, by a value of at least 5%. This is the cumulative bonus accrued during one policy year in which no claim has been made by the insured. The cumulative bonus can be accumulated for a maximum period of 10 years.
• The cumulative bonus that a policy holder is eligible to receive on his/her health insurance policy will be stated in the policy document.
• The cumulative bonus can be applied to the sum assured for a 3-year period. This can help renew the policy by the due date as well.
• The cumulative bonus will expire if the person does not renew the Health Insurance policy by the due date.
• The rate at which the sum insured is increased each year varies from 10% - 50%.
• Claims made during overlapping periods of two Health Insurance policies will get the benefit of the available sum insured and the cumulative bonus will not be reduced to zero.

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Cheers,
BB Expert

Cumulative Bonus is just like No Claim Bonus that if you have not made any claim through out the year you can enjoy the benefit of this bonus for the following year.

To get more detailed information on this in an easy way, you can visit this page of Cumulative Bonus in health insurance article.

You can go through the page of health insurance for more details.