What is cumulative bonus in health insurance?


Health insurance policyholders get ‘rewarded’ in the form of cumulative bonus for not making claims. This doesn’t translate into direct discounts on renewal premiums. Health cover will be enhanced by 5-50 percent every year without any extra premium, depending on product and insurer. It can go up to maximum of 50-100 percent over the years. If you make claim later, accumulated bonus is typically reduced by same rate in which it had accrued. If your Rs 10-lakh cover was enhanced by 10 percent to Rs 11 lakh and you make a claim later, your sum insured in the subsequent year will go down to Rs 10 lakh again.

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