Cumulative Bonus in Health Insurance: 7 Hidden Benefits That Save Your Money

Health insurance is one of the best things one can do for themselves and their families. While some may hesitate to allocate their hard-earned money towards a health insurance plan, it ultimately proves to be invaluable during unexpected medical emergencies, aiding in the payment of hospital bills and associated medical expenses.

Table of content

• What is a Cumulative Bonus in Health Insurance?
• How Does Cumulative Bonus Work?
• 7 Benefits Of a Cumulative Bonus
• Tips to Maximise Your Cumulative Bonus

Beyond fundamental coverage, health insurance policies also offer additional benefits, including a cumulative bonus, also known as a no-claim bonus or renewal bonus. Here is all you need to know about the cumulative bonus in health insurance, how it works, its benefits and more:

What is a Cumulative Bonus in Health Insurance?

A Cumulative Bonus in health insurance is basically a reward offered by insurance companies to policyholders for not making any claims in the policy years. The bonus is typically added to the sum insured at the time of policy renewal without any additional charges. This means you have an increased coverage amount without a premium increase.

The ultimate aim of these types of bonuses in insurance is to incentivise the policyholder not to make small or unnecessary claims, thereby encouraging them to be more responsible towards their health insurance.

How Does Cumulative Bonus Work?

Now that you understand what a no-claim bonus in health insurance is, it is time to understand how it works.

The working of the cumulative bonus is quite simple. When a policyholder does not make any claim during the year, the insurer adds a certain percentage to their sum insured as a bonus. The percentage can vary from insurer to insurer, but typically ranges between 5% to 10%.

To help you better understand this, here is an example: Imagine you have a health insurance policy of 5 lakhs and do not make any claims during the year, the insurer might add 5% of your sum insured, which is INR 25,000, to your coverage next year. This means in the next policy year, you will have INR 5,25,000 instead of INR 5,00,000.

Suggested Read: Top Mistakes to Avoid When Choosing Health Insurance

7 Benefits Of a Cumulative Bonus

Here are the 7 hidden benefits of a cumulative bonus or renewal bonus in health insurance:

1. Higher Coverage Without Additional Cost

A key benefit of a cumulative bonus is that you get a higher sum insured without any additional costs. This means you get more value out of your coverage at the original premium cost, which is quite valuable in managing healthcare expenses.

2. Encourages a Healthy Lifestyle

By incentivising policyholders for not making any claims in the policy years, the insurer is encouraging them to live a healthier lifestyle. Prioritising well-being and preventive care not only saves you from any unexpected medical expenses but also helps improve your overall quality of life.

3. Provides Financial Security

By accumulating bonuses over time, the cumulative bonus can help policyholders build a financial cushion to provide security and peace of mind during unexpected medical emergencies or health crises.

4. Acts as a Buffer Against Inflation

With rising healthcare charges, the cumulative bonus helps you to increase your coverage amount every claim-free year, safeguarding your health against future medical inflation.

5. Prevents Unnecessary Claims

Unlike the other types of insurance solutions that might offer increased coverage at a higher premium, cumulative bonuses allow you to enjoy extra coverage without impacting the annual premium amount.

6. Long-Term Savings

By maintaining a claim-free record and earning cumulative bonuses, policyholders can avoid the need for additional top-ups or costly policy upgrades, helping save money in the long run.

7. Promotes Long-Term Relationships

By motivating policyholders to stay claim-free and continue their coverage, the cumulative bonus strengthens long-term trust and loyalty between insurers and policyholders, creating a relationship that benefits both parties over time.

Tips to Maximise Your Cumulative Bonus

Here are some ways you can maximise your cumulative or renewal bonus in health insurance:

• Avoid making small claims and consider making payments out of your pocket for small medical expenses. This will ensure you don’t disqualify from earning a cumulative bonus.
• While exploring different health insurance solutions, ensure that you opt for an insurer that offers a higher cumulative bonus percentage.
• Maintain a healthy lifestyle to avoid medical treatment and maximise your claim-free years.
• Ensure that you renew your health insurance on time every year to avoid losing your cumulative bonus.

As we conclude, it is clear that a cumulative bonus is a beneficial feature that can enhance your coverage over time without increasing your premium amount. Whether you're planning for future uncertainties or aiming to minimise out-of-pocket expenses, the cumulative bonus offers a smart way to maximise benefits while keeping costs steady.

Looking to buy health insurance that offers real value and peace of mind? Muthoot Finance has got you covered. With flexible plans, reliable customer support, and added benefits like cumulative bonuses, our health insurance is more than just a policy; it’s a financial safety net that grows with you.