Cumulative bonus means in health insurance plan


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




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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