Cumulative Bonus
What is a Cumulative Bonus in Health Insurance?
A Cumulative Bonus, often referred to as a No Claim Bonus, is a benefit offered by health insurance companies to policyholders who do not make any claims during the policy year. This bonus usually takes the form of an increased coverage amount for the subsequent year without an increase in the premium.
Benefits of Cumulative Bonus
- Increased Coverage: Increases the sum insured for the next policy year
- Cost-Effective: Provides additional coverage without any extra cost in premiums
- Reward for Good Health: Acts as a reward for maintaining good health and not filing any claims
How Does Cumulative Bonus Work in the UAE?
Example: Suppose you have a health insurance policy with a sum insured of AED 100,000. The policy includes a cumulative bonus of 10% for every claim-free year, up to a maximum of 50%.
- Year 1: You make no claims throughout the year. At the renewal, your sum insured increases by 10%. So now, it's AED 110,000.
- Year 2: Another claim-free year leads to another 10% increase, raising the sum insured to AED 121,000.
- Year 3: You make a small claim this year. Your sum insured remains at AED 121,000 for the next renewal, and no cumulative bonus is applied.
This increment continues until the maximum limit (in this case, 50% or AED 150,000) is reached, provided no claims are made.
Do All Health Insurance Policies in UAE Provide Cumulative Bonus?
- Not Universal: While many health insurers in the UAE offer a cumulative bonus, it is not a universal feature across all policies.
- Varies by Insurer: The availability and terms of cumulative bonuses can vary significantly between different insurers and plans.
Policy Specifics: It's essential for policyholders to review their insurance documents or consult their insurer to understand whether a cumulative bonus is included and how it is structured.
