What Is Cumulative Bonus In Case of Health Insurance
What is a Cumulative Bonus, and how does it work? A Cumulative/No-Claim Bonus is a monetary benefit given to you if you have not filed a claim in the previous year of the policy period. The advantage of a Cumulative Bonus might be a rise in the sum guaranteed or a reduction in the premium paid. What is Cumulative Bonus and how does it work? As an example, consider Abhijeet's situation. Abhijeet has chosen a policy that provides him with a cover of Rs 2,00,000 and a 50 percent cumulative bonus at renewal, up to 100 percent of the entire money covered. Because he did not file a claim during the first year of his coverage, an extra Rs 1,00,000 was added to his total covered at renewal, bringing it to Rs 3,00,000. If he does not submit a claim the next year, his insured money will grow by Rs 1,50,000, bringing the total to Rs 4,50,000 but since cumulative bonus is generally capped at 100 percent the insured amount will become Rs. 4,00,000 a 100 percent increase over , the increment will come to an end at this point.