What is a Cumulative Bonus in Health Insurance?

Health Insurance

In these times of rising prices, having a health insurance policy is immensely important. If a medical emergency strikes, a health insurance plan helps you be assured that you need not pay the hefty expenses from your pocket. You can simply raise a claim and the bills for the medical treatment will be paid by the insurer. However, many people tend to think of health insurance as an expense. They have the misconception that if they are not raising any claims, they may end up losing their money. A feature called the cumulative bonus ensures that this does not occur. Let’s see how.

What is a cumulative bonus? 

When you do not raise any claims during the policy tenure, the insurer grants you the cumulative bonus. As per this feature, you receive a discount on the premium or an increase in the sum assured for a claim-free policy term. As its name suggests, this feature is cumulative in nature. Hence, the bonus amount increases with each claim-free year.

Usually, the cumulative bonus feature can be extended to a certain number of years. That is, the maximum discount is considered for those consecutive claim-free years only.

Features of the cumulative bonus in health insurance

  • Acts in either of the two ways 

The cumulative bonus is also called a No Claim Bonus and may benefit you in either of the two ways.

Firstly, you can get an increase in the sum assured amount. So, the maximum amount you are eligible for in the event of a claim being raised in the future increases. This helps you access the best quality treatment without consideration of the finances.

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Alternatively,the insurer grants you this bonus by reducing the premium of your policy during your upcoming health insurance renewal. This reduction does not affect the overall coverage of your policy. You continue to receive the coverage you want, but at a reduced rate.

Note that you will not receive both benefits at once. You can reach out to your insurer and ask for details on what kind of benefit you are eligible for.

  • Is also applicable for family plans 

The cumulative bonus feature is applicable not only for individual plans but also for family health insurance plans. However, as may be obvious to some, the chances of receiving this bonus within a family plan are fewer due to the higher number of people being covered. More people being covered means an increased likelihood of a claim being raised. Nevertheless, if you have had a claim-free year on your family plan, the cumulative bonus feature will kick in to benefit you.

  • Bonus limited to a certain amount 

As mentioned before, the bonus that you accumulate through this feature has a limit. It may be presented in the number of consecutive claim-free years you can have. Or it may be limited to a particular percentage of the sum insured amount. For instance, most plans limit the bonus to a maximum of 50% of the sum insured amount. So, if your sum insured is Rs 5 lakhs, and the bonus value has reached Rs 2.5 lakhs, it will stop accumulating after that.

  • Bonus may be lost in the event of a claim 

If you have acquired one or more bonuses after one or more claim-free years, and then make a claim via your health insurance app or otherwise, then you lose out on the benefits you have obtained till now. It is advisable to avoid making any minor claims, especially if they are avoidable, to ensure a smooth claim-free streak until you reach the upper limit.

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However, you should not let the accumulated bonus stop you from making claims where required.

The cumulative bonus can also encourage one to stay healthy and maintain an active lifestyle where the chances of getting hospitalised and raising a claim are few.

The terms and conditions of the cumulative bonus feature may differ from policy to policy. Some basic health plans may not have the bonus feature at all. It is ideal to reach out to your agent or insurance representative to seek details regarding the cumulative bonus clause in your health insurance policy.


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