{"id":749,"date":"2025-07-18T08:00:32","date_gmt":"2025-07-18T08:00:32","guid":{"rendered":"https:\/\/www.coversure.in\/blog\/?p=749"},"modified":"2026-09-26T22:13:27","modified_gmt":"2026-09-26T22:13:27","slug":"what-is-cumulative-bonus-in-health-insurance","status":"publish","type":"post","link":"https:\/\/www.coversure.in\/blog\/health-insurance\/what-is-cumulative-bonus-in-health-insurance\/","title":{"rendered":"What Is Cumulative Bonus In Health Insurance?"},"content":{"rendered":"\n\n\n\n\n
AI OVERVIEW<\/span><\/th>\n<\/tr>\n<\/thead>\n
A cumulative bonus (CB) in health insurance is extra sum insured your insurer adds at renewal, usually for every claim-free year, without charging extra premium. It typically grows by a fixed percentage of the base sum insured each year (commonly between 10% and 100% per year, depending on the plan) up to a cap (commonly 50% to 500% of the base cover). Under the IRDAI Master Circular on Health Insurance Business dated 29 May 2024, a no-claim bonus can be offered either as an increase in sum insured or as a discount on renewal premium. Some plans reduce the bonus after a claim (clawback), while others add it every year regardless of claims. The bonus is lost if the policy lapses beyond the grace period, and it counts toward continuity when you port. Treat it as a buffer on top of adequate base cover, never as a replacement for it.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The \u20b95 lakh policy that thinks it is a \u20b910 lakh policy<\/b><\/h2>\n

Picture Arjun, 31, sitting in a hospital billing queue in Pune. His renewal notice last year proudly said “Total cover: \u20b98 lakh.” He bought \u20b95 lakh. The other \u20b93 lakh? A cumulative bonus he earned by simply not falling sick for three years.<\/span><\/p>\n

The bill in his hand says \u20b99.4 lakh.<\/span><\/p>\n

Here is the uncomfortable part. Arjun never asked three questions: Does my bonus shrink if I claim? Is my room rent limit calculated on \u20b95 lakh or \u20b98 lakh? And what happens to that \u20b93 lakh if I switch insurers? Most people don’t ask either, because a cumulative bonus feels like free money. It is free. It is just not always as solid as it looks on the renewal notice.<\/span><\/p>\n

This guide unpacks exactly how a cumulative bonus works in India, what IRDAI rules say about it, how clawbacks are calculated, where the fine print bites, and how to make your bonus actually work for you. Grab a chai. We are doing the maths too.<\/span><\/p>\n

What is a cumulative bonus in health insurance?<\/b><\/h2>\n

A cumulative bonus is an increase in your sum insured that your insurer adds at renewal, as a reward, without increasing your premium for that bonus.<\/span><\/p>\n

Technically, it is a form of <\/span>No Claim Bonus (NCB)<\/b> in health insurance. IRDAI’s Master Circular on Health Insurance Business (29 May 2024) allows the no-claim benefit to be given in one of two ways:<\/span><\/p>\n

    \n
  1. As a cumulative bonus:<\/b> your sum insured grows (for example, \u20b95 lakh becomes \u20b95.5 lakh).<\/span><\/li>\n
  2. As a premium discount:<\/b> your renewal premium drops for a claim-free year.<\/span><\/li>\n<\/ol>\n

    In practice, the vast majority of retail health plans in India pay the reward as a cumulative bonus. Pure premium-discount versions exist but are rare.<\/span><\/p>\n

    In simple words: <\/span>stay claim-free (or, in some plans, just keep renewing), and your cover quietly grows every year.<\/b><\/p>\n

    Cumulative bonus vs No Claim Bonus: are they the same?<\/b><\/h3>\n

    Mostly, yes, with one important twist in usage:<\/span><\/p>\n\n\n\n\n\n\n\n\n
    Point of difference<\/span><\/th>\nHealth insurance (Cumulative Bonus)<\/span><\/th>\nMotor insurance (No Claim Bonus)<\/span><\/th>\n<\/tr>\n<\/thead>\n
    What you get<\/span><\/td>\nHigher sum insured<\/span><\/td>\nDiscount on own-damage premium<\/span><\/td>\n<\/tr>\n
    Typical growth<\/span><\/td>\nA fixed % of base sum insured per year<\/span><\/td>\nDiscount ladder of 20%, 25%, 35%, 45%, 50%<\/span><\/td>\n<\/tr>\n
    After a claim<\/span><\/td>\nReduced, reset, or untouched (depends on plan type)<\/span><\/td>\nUsually resets to zero (unless an NCB protector add-on is taken)<\/span><\/td>\n<\/tr>\n
    Portable?<\/span><\/td>\nCounted for continuity when you port<\/span><\/td>\nTransferable to a new vehicle\/insurer in the owner’s name<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

     <\/p>\n\n\n\n
    (If you own a car or bike, our <\/span>Motor Club<\/span><\/a> keeps your motor policy, PUC and challans in one spot, so your motor NCB doesn’t vanish because of a missed renewal. More on why that matters in our piece on the <\/span>3 secret benefits of having motor insurance<\/span><\/a>.)<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    Why does a cumulative bonus exist (and why should you care)?<\/b><\/h2>\n

    Three reasons, one for you and two for the insurer:<\/span><\/p>\n