Friday, June 27 2025
Source/Contribution by : NJ Publications

When it comes to health, we all want the best care for ourselves and our family. Medical expenses are rising quickly and unexpectedly, having a good health insurance policy is no longer a luxury-it's a necessity.

Insurance policy is an agreement(contract) between the insurer (insurance company) and the insured (policyholder). It is based on the information the insured provides in the proposal form, making it the most important part of the entire contract (agreement). An insurance company offers a policy on the basis of a proposal form and other information related to the insured. It seeks all the relevant information from the policyholder in order to underwrite the risk.

The proposal form includes

• The insured's basic information such as address, age, name, education, income, etc;

• Occupation, medical history, lifestyle habits like smoking / drinking, etc;

Still, many people make mistakes when buying health insurance. These mistakes can lead to policy/claim rejections, inadequate coverage, or even policy cancellation. This article will help you understand how to avoid some common mistakes. Whether you're buying health insurance for the first time or reviewing your current plan, these tips will come in handy.

In-appropriate practices

Some of the most important points while filling proposal form.

1. Consult an Insurance Expert

With so many policies in the market, it's easy to get confused. Many people buy policies just because a relative or bank executive recommended it-not because it fits their needs.

Take the help of a qualified insurance advisor. An insurance expert will:

• Understand your health needs, age, and family size

• Recommend plans with suitable cover, benefits, and premium

• Explain terms & conditions in detail

• Help you compare plans from different companies

This small step can prevent a big mistake.

2. Disclosure of Medical Condition, Lifestyle habits honestly

When filling out the application, be completely honest about your health history. Disclose any past or current illnesses, surgeries, injuries, or regular medication. Insurance companies measure you based on your current and past health information provided in the proposal form.

Insured members must inform about his/her lifestyle habits like the consumption of alcohol, tobacco and other drugs. Addictive/intoxicating substances such as tobacco & alcohol have a negative impact on health.

Insurers also check for inconsistencies in the proposal, telecalling along with medical reports. They (Insurers) also verify the proposal form details with diagnostic reports or insured's remarks on the phone call.

Many times, people do not disclose their current health condition, recent medical diagnosis or ongoing investigations in the proposal form so as to obtain better coverage for lower premium or to avoid the waiting period or rejection.

If they(insurance company) find out you've hidden anything important, they have the right to reject your claim-even if the illness is unrelated to what you've hidden. Hiding any important information may result in your policy being cancelled as well.

For example, Mr. Raj was hospitalised for treatment of a heart ailment, the insurance company from the hospital sources came to know that he had diabetes before taking insurance policy and as a result the claim got rejected. This is because he did not mention diabetes in the proposal form while buying the policy. Therefore, complete medical history must be given in the medical questionnaire asked in the form.

3. Understand the Moratorium Period

The moratorium period means after continuous completion of 5 years from inception of your first health insurance policy, the insurer cannot question the validity of your policy based on non-fraudulent errors or non-disclosure.

It's different from the waiting period (when some diseases aren't covered), but it's equally important. Once this period is over, your claims are far less likely to be rejected due to errors made while buying the policy.

So, buy your policy early and continue it without breaks. That way, you complete the moratorium period sooner and enjoy stronger comprehensive protection.

4. Don't Ignore the Fine Print - Verify the Policy Document

Once your policy is issued, verify the details in your policy document thoroughly. This includes:

• Name, age, and details of all insured members

• Health declarations made during the application

• Policy start and end date

• Sum insured (risk cover amount)

• Waiting periods, exclusions, sub-limits

If there are any mistakes or missing details, get them corrected immediately. Don’t wait or delay till you need to make a claim.

Final Thoughts: Secure Your Health, Secure Your Future

Health insurance is not just a formality-it's a financial safety net. Buying the right policy means you don't have to worry about hospital bills during a crisis. It means your savings remain safe, your family stays protected, and you can focus on recovery, not expenses.

Health is uncertain, but your financial preparedness doesn't have to be. Act early, choose wisely, and avoid the mistakes that many regret later.

Friday, June 6 2025
Source/Contribution by : NJ Publications

Medical treatments are becoming more expensive and sophisticated, meaning the cost of hospitalization, diagnostics and daycare procedures are creeping upward. It would be more logical if your coverage could also increase alongside these rising costs, without you having to shell out huge premiums?

No Claim Bonus (NCB) and Guaranteed Cumulative Bonus (GCB) are two powerful, yet often overlooked features of a health insurance policy. Both reward you for staying healthy-either by not making claims or simply by renewing your plan-allowing your sum insured to grow beyond its original risk cover amount (base sum insured). Over time, these bonuses can double, triple, five/ten fold your protection, offering a growing financial safety net just when you need it most.

In this article, we'll explore:

1. Exactly what NCB and GCB are

2. How they work, with real-life examples

3. Why this is important

4. Tips to maximize your bonus-driven cover growth

1. What Are NCB and GCB?

No Claim Bonus (NCB) - NCB is essentially a "reward for not taking claims" If you complete a full policy year without filing any claims, your insurer acknowledges your low-risk profile by either:

• Discounting your renewal premium, or

• Adding a percentage of the base sum insured to your coverage-at no extra cost.

Early versions of NCB focused on premium rebates (typically 5-10% per claim-free year). Today, most plans use NCB to increase your actual protection. For instance, a 50% NCB on a ₹5 lakh policy adds ₹250,000 to your sum insured upon renewal-turning it into a ₹7.5 lakh policy for the same premium you already pay. If you go claim-free again next year, you earn another 50% on ₹7.5 lakhs, taking you to ₹10 lakhs in coverage.

Guaranteed Cumulative Bonus (GCB) - GCB takes the "claim-free" requirement off the table. Whether or not you lodge any claims, every renewal brings a fixed percentage increase (often 10-20%) to your sum insured-again, without extra premium. This guarantees a steadily rising coverage floor, which is especially useful if you anticipate needing treatment but still want the comfort of growing protection.

2. How They Work-Real-Life Scenarios

Example where policy provides NCB: The Sharma family bought their health insurance policy with a ₹5 lakh sum insured capped at 200% of the base sum insured.

Year 1 (No Claims)

• Base cover: ₹5 lakhs

• NCB earned: 50% → +₹250,000

• Renewed cover: ₹7.5 lakhs

Year 2 (Claim)

• They filed a ₹120,000 claim for a surgery.

• Due to this claim, their accumulated NCB wasn’t lost-just reduced by 50%.

• Renewed cover: ₹5 lakhs

Year 3 (No Claims)

• NCB earned: 50% → +₹250,000

• Renewed cover: ₹7.5 lakhs

Thanks to the NCB, the health insurance policy of Sharma's simply kept growing their cover after managed claims.

Example where policy provides NCB: Mr. Patel, a 50-year-old, wants his coverage to expand over time irrespective of him taking claims. He bought a plan with a guaranteed 25% GCB, capped at 500% of the base sum insured.

Policy Timeline

• Year 1 renewed: ₹5 lakhs → +25% = ₹6.25 lakhs

• Year 2 renewed: ₹6.25 lakhs → +25% = ₹7.5 lakhs

• Year 3 (Hospitalisation claimed): Despite a ₹2 lakhs claim, GCB still kicks in → ₹7.5 lakhs → +25% = ₹8.75 lakhs

By Year 5, Mr. Patel's coverage doubles to ₹10 Lacs and by year 10, coverage becomes 4 times - meaning his ₹5 lakh plan now offers ₹20 lakhs of protection, regardless of claims taken.

Why This is Important

• Free Coverage Increases - Every percentage point of NCB or GCB translates into more protection at zero extra premium. Over a 5-year span, you could add ₹10 lakhs or more to a ₹50 lakh policy, effectively increasing your safety net without amplifying your premiums.

• Rising Medical Costs - Medical inflation in India is approx 12 - 14% annually-much higher than general inflation. Bonus-driven increases help your coverage keep pace, ensuring you aren't left underinsured when treatment costs surge.

• Cushion Against Big Bills - Whether it's a complex cardiac procedure or extended ICU stay, having a larger sum insured can be the difference between manageable out of pocket expenses and a huge debt.

• Encouragement for Healthy Living - Knowing that claim-free years translate directly into higher cover provides a powerful incentive for preventive care: regular check-ups, healthier diets, and early intervention. In other words, bonus schemes not only protect your wallet but also reinforce better health habits.

Things to Watch Out For

• Maximum Limits - Most NCB schemes cap at 100% - 200% of your base sum insured; beyond that, no further bonus accrues. Ensure you know your plan's maximum cover limit.

• Claim-Impact on NCB - If you anticipate needing occasional claims, consider plans that preserve some or all of your bonus.

• Premium Revisions - Although NCB/GCB adds free cover, due to factors like age, region and medical inflation - insurers may still revise base premiums after approval from the regulator IRDAI. 

• Consult an insurance expert: A consultation with a qualified insurance professional can help you understand the nuances of the bonus features, identify additional add-ons/riders, and customize a plan that aligns perfectly with your medical requirements and financial goals.

Conclusion

No Claim Bonus(NCB) and Guaranteed Cumulative Bonus(GCB) are more than just policy features. They're strategic levers that let you build progressively stronger health protection, without proportionally higher premiums. By understanding how these features work-and picking plans with generous bonus rates and sensible sum insured bonus limits-you can turn disciplined health management into real financial security.

Harness the power of NCB and GCB to let your coverage grow alongside you-so that, when life's medical challenges arise, you'll be armed with far more than just hope: you'll have a steadily expanding safety net.

Empower your health journey today-because a proactive approach to insurance can pay dividends in both peace of mind and financial security.

Friday, May 16 2025
Source/Contribution by : NJ Publications

Health insurance is a financial safety net that protects you and your loved ones from unexpected medical expenses. Despite its undeniable importance, many individuals postpone purchasing a health insurance policy, assuming that they are healthy and do not need it immediately. However, delaying this crucial decision can have severe financial and medical consequences. 

Many young, fit, and health-conscious individuals often question the need for health insurance. They believe that their active lifestyle protects them from illnesses, making insurance an unnecessary expense. However, the truth is that the best time to buy a health insurance policy is when you are young and healthy. Investing in health insurance early offers financial security, wider coverage, and several long-term benefits. Here’s why you should act now and secure your health insurance at the earliest, regardless of your current age & health condition.

Health Risks are Unpredictable

Life is uncertain, and health issues can arise at any time, regardless of age or fitness levels. Accidents, chronic diseases, or sudden medical emergencies can lead to significant financial burdens. Having a health insurance policy ensures that you receive quality medical care without worrying about hefty hospital bills.

More Options, Better Coverage

When you are young, you have access to a broader range of health insurance plans, both basic and comprehensive. As you grow older, the risk of chronic diseases such as asthma, diabetes, hypertension, and cancer increases, restricting your insurance options. Many insurers impose limitations, higher premiums, or outright deny coverage to individuals with pre-existing conditions.

Additionally, young policyholders can opt for higher sum insured amounts, such as Rs. 50 lakhs or Rs. 1 crore, at lower premiums. In contrast, older individuals may struggle to find high coverage amounts due to increased health risks, making comprehensive insurance costlier and harder to obtain.

Maternity Benefits for Future Planning

For young couples, purchasing health insurance early is a smart move, especially when considering family planning. Many health insurance plans offer maternity benefits, covering prenatal care, delivery, postnatal care, and medical expenses for newborns.

However, most maternity benefits come with a waiting period ranging from 9 months to 3 years. By investing in health insurance early, you can serve this waiting period in advance, ensuring coverage when you need it without financial strain.

Beat the Waiting Periods

Health insurance policies come with specific waiting periods before claims become eligible. Some key waiting periods include:

• First 30 days: No claims allowed except for accidents.

• Initial 2 years: Waiting period for specific diseases/treatments like cataracts, hernia, and joint replacements.

• Maternity waiting period: Typically between 9 months and 3 years.

• Pre-existing diseases waiting period: Usually 3 years.

By purchasing a policy early, you can serve these waiting periods when you are less likely to require claims, ensuring uninterrupted coverage when needed.

Enjoy Wellness Benefits

Many health insurance policies now include wellness benefits that promote a healthier lifestyle. These may include annual health check-ups, vaccinations, and preventive screenings. Such services not only help in early detection of medical conditions but also reduce long-term healthcare expenses.

Moreover, insurers reward policyholders who maintain an active lifestyle. Regular exercise, yoga, swimming, and running can earn wellness points under certain plans. These points can then be redeemed for discounts on renewal premiums, ranging from 5% to 50%, making insurance even more cost-effective.

Lower Premiums: Save More in the Long Run

Age is a crucial factor in determining health insurance premiums. The younger you are, the lower your premiums, as insurers consider younger individuals to be at lower health risk.

Existing ailments also lead to higher premium rates. By purchasing insurance early, you can lock in lower premiums and enjoy long-term savings. Over time, these savings accumulate significantly, making early investment in health insurance a financially prudent decision.

Skip the Pre-Policy Medical Tests

As you age, insurers require pre-policy medical tests to assess your health status before issuing a policy. Individuals over 45 or those with a pre-existing condition often have to undergo these tests. If any medical issues are detected, insurers may increase premiums or deny coverage.

However, young individuals usually do not require medical tests, leading to hassle-free and quicker policy issuance. By getting insured early, you can avoid these extra medical requirements and secure a policy without complications.

Maximize No Claim Bonus & Guaranteed Cumulative Bonus

Health insurance providers offer a No Claim Bonus (NCB) to policyholders who do not make claims during the policy year. This bonus increases the sum insured at no additional cost, typically ranging from 5% to 200% of the initial sum insured.

For example, if you start with Rs. 5 lakhs, your sum insured can increase to Rs. 20 lakhs, Rs. 25 lakhs, or even Rs. 50 lakhs over the years without extra charges.

A Guaranteed Cumulative Bonus (GCB) works similarly but applies regardless of claims made. This means your coverage continues to increase over time, offering better protection against unforeseen medical emergencies. When you don't delay in buying health insurance, you can take full advantage of these benefits to maximize your health coverage.

Conclusion: Act Now, Secure Your Future

Health insurance is a crucial part of financial planning and long-term security. Delaying the decision to buy health insurance can prove costly in the long run. Whether you are young and healthy or have an existing medical condition, securing health insurance today ensures financial protection and peace of mind for the future. 

By investing in a plan today, you safeguard your future, protect your finances, and ensure access to quality healthcare when needed the most. Waiting too long can lead to limited options, higher costs, and restricted coverage due to age-related medical conditions.

Don’t wait until an emergency strikes-act now and safeguard your health and finances.

Make the right choice today. Buy your health insurance now!