Cumulative Bonus in Health Insurance

A cumulative bonus in a health insurance policy refers to a monetary advantage you gain as a reward for not making any claims in one policy year. It is very similar to the concept of a no claim bonus.

However, the type of benefit you receive differs from one health insurer to another. Some insurers reward you with a discount on your premium for your consequent policy year. In contrast, some insurers offer an additional sum insured to your health insurance without any increase made in your health insurance premium.

Typically, most insurers offer a 5% to 50% increase in the sum insured for each claim-free year.

However, at Digit, we offer you an increase in your Sum Insured, up to 50% for every claim-free year (with a maximum benefit of 100%). 🙂

Did you know there are types of cumulative bonus for health insurance in a claim-free year? Yes. Generally, the cumulative bonus is provided in two different types. Let’s understand both of them:

Discount on Premiums

As previously stated, insurance companies provide this type of bonus to policyholders who maintain a claim-free record for a full year. In this case, the insurance provider would provide the policyholder with a lower premium for the same amount (same sum insured) in their next cycle.

A discount on the premium option may not be available under every insurance policy, and the advantages of the bonus vary depending on the insurance company. Therefore, it is crucial to look for this feature and select a policy that offers it.

Bonus on the Sum Insured

If you haven't filed a claim for a year, your medical insurance plan's sum assured is boosted with a cumulative bonus. In this manner, you might receive greater benefits from your health insurance for the same amount.

The rise in the sum insured in health insurance under cumulative bonus is contingent upon the percentage provided by the insurance provider and may differ between insurers. However, the coverage has a cap that can be raised through cumulative bonuses.

In health insurance, cumulative bonuses are essential for encouraging good habits, improving affordability, cultivating loyalty, supporting preventative care, and guaranteeing insurance coverage during emergencies.

Here are some important roles of cumulative bonus in health insurance:

Encourages Healthy Behavior:

The Cumulative Bonus encourages better lifestyles and preventative care procedures, rewarding policyholders for being healthy and avoiding claims in a year.

Improves Affordability:

Policyholders who receive bonuses see a rise in their sum insured or a bonus amount added to their policy. This helps ensure appropriate coverage and manage the finances because of the escalating healthcare costs.

Encourages Loyalty:

By rewarding people for their efforts to preserve excellent health, the Cumulative Bonus encourages loyalty between policyholders and insurers, encouraging people to remain loyal to their insurance company.

Promotes Long-Term Connections:

Cumulative Bonus helps create long-lasting connections between insurers and insurance companies by encouraging policyholders to stay faithful and claim-free, which benefits both sides.

Encourages Preventive Treatment:

By accumulating cumulative bonuses, policyholders are motivated to choose preventive treatment, leading to improved health outcomes, fewer medical claims, and decreased healthcare expenses.

So far, you might have understood what a cumulative bonus in health insurance is and how it works. With other insurance providers, you can get a cumulative bonus either by getting a discount on premiums or a bonus on the sum insured, which is around 5 to 50% only.

But with Digit, you can be rewarded with a 50% increase in Sum Insured for every claim-free year, up to a maximum of 100%, i.e. when you don’t claim for two consecutive years. Amazing no!? 😁

Let’s understand the cumulative bonus in Digit’s health plan.

A cumulative bonus does not only benefit in terms of the increased sum insured. There are several other benefits of having a cumulative bonus, which includes:

• You will either get a discount on your premium or have more money as part of your insured sum.
• You can save money upon renewal by getting more coverage at the same premium.
• For some plans, you can continue to accumulate your cumulative bonus for up to 10 years.
• If your hospital bills are low, you can pay them yourself and make the most of the cumulative bonus.
• It motivates you to maintain your health and steer clear of medical bills.
• It improves financial protection, which might benefit when the actual costs exceed the usual coverage limit.

P.S: Always remember to renew your health insurance policy on time to avoid the cumulative bonus expiration. After all, it comes as a reward for staying healthy.

If you claim after receiving one or more cumulative bonuses, you will lose the advantage of the previous year's cumulative bonus under the health insurance policy.

For example, if you have accrued a total of 30% bonus on your sum insured over three years and your plan provides a 10% increase in the sum insured amount for each year without a claim, then if you file a claim in the fourth year, your sum insured will drop by 10%.