No-claim bonus in health insurance is different from motor insurance NCB and in some ways more valuable. In health insurance, a no-claim bonus grows your sum insured for every claim-free year at no extra premium. Understanding how it accumulates, when it resets, and what happens at portability can protect significant additional coverage that many policyholders unknowingly lose.
How Health Insurance NCB Works
For every claim-free policy year, most insurers add a percentage typically 10% to 50% to your base sum insured at renewal, without increasing the base premium. Example: a ₹10 lakh policy with 50% annual NCB grows to ₹15 lakh after one claim-free year and ₹20 lakh after two, all at the same premium as the original ₹10 lakh policy.
Some policies cap NCB accumulation at 100% of the base sum insured. Others allow unlimited accumulation. Some premium plans offer ‘Super NCB’ where the sum insured doubles in a single claim-free year. Check the specific NCB structure of your policy , these terms vary significantly across insurers.
The compounding effect is significant. At 14% annual medical inflation, accumulated NCB is not just a bonus , it is protecting real purchasing power against rising healthcare costs.
What Happens When You Make a Claim
When you make a claim, your accumulated NCB is reduced or reset, depending on the policy. Policies with binary reset clauses reduce your NCB to zero after any claim, regardless of size. More policyholder-friendly structures reduce NCB proportionately based on claim size relative to sum insured. A small claim on a policy with a binary reset can wipe out years of accumulated cover.
Before filing a claim, calculate what you stand to lose. A ₹30,000 claim that resets a ₹5 lakh accumulated NCB costs you more in lost coverage than it saves. When the repair or treatment cost is meaningfully less than the NCB value, paying out of pocket preserves years of built-up protection.
NCB Protector Riders
Several insurers offer NCB Protector add-on riders that allow one claim per year without resetting accumulated NCB. For families with young children or elderly parents where at least one small claim per year is likely, an NCB Protector can preserve significant accumulated cover. Evaluate the rider cost against the expected frequency of small claims for your family profile.
NCB and Portability
When porting a health insurance policy, IRDAI’s portability rules require the new insurer to honour waiting period continuity but NCB transfer depends on the new insurer’s terms. Some insurers match accumulated NCB; others require you to start from zero. Confirm this explicitly before porting. Losing accumulated NCB at portability is a hidden cost that can negate the premium saving that motivated the switch.
Draco Insurance helps you evaluate NCB structures across insurers and identify plans where your accumulated benefit is best protected. Visit dracoinsurance.in or call +91 7064106417.
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