Ask Mint Money | In motor cover, no-claim bonus becomes nil if you make a claim

Ask Mint Money | In motor cover, no-claim bonus becomes nil if you make a claim

I have been working in a private sector company for four years and have a corporate health insurance. I plan to resign and do freelancing. Can I convert my health insurance from the company to individual health insurance by paying an additional premium?

—Shikha Haldia

There is no provision to convert coverage under a group policy provided by the employer into personal health insurance. The basic reason is that the insured in the group policy is the employer—the group policy is issued to the employer and not the employee. On the other hand, the insured in a personal policy is the individual. Hence, a policy issued to one insured cannot be extended to another insured. Another reason is that most group policies are customized and have benefits that are not available in individual policies, which are pre-packaged off-the-shelf products. Therefore, the same policy cannot be carried forward.

You will have to buy a fresh individual health cover.

What happens to accrued no-claim bonus (NCB) once a person has a claim?

—Rohit Mansukhani

Insurers give NCB in motor and health insurance. In case of motor insurance, the entire NCB is rescinded once a claim is paid by the insurer. Note that the insurer can’t revoke the bonus if just a loss is reported. It is cancelled only when the claim is paid or the liability for the claim is acknowledged by the insurer.

In case of health insurance, NCB is reduced if a claim is made. In individual health insurance policies, insurers give an additional 5% sum insured as NCB for every claim-free year up to a maximum of 50% of the basic sum insured. If a claim is taken in a policy period, the NCB is reduced by 5%. However, this reduction is only up to the basic sum insured and there cannot be a deduction in the basic sum insured if a claim is taken in the first year of the policy.

I took a floater plan when my son was below 18 years of age. I now want a separate policy for him to cover him for all illnesses for a long time. Suggest a plan in which the premium doesn’t go up sharply in later years.

—Santanu Sen

All health insurance policies cover treatment for all kinds of ailments, diseases and illnesses, provided they are not by birth (congenital) or existing at the time of taking the policy for the first time (pre-existing). Therefore, you can choose any insurer. If your experience with your current insurer is good, should stick to the same one as the new policy can be a continuation of his current coverage. The benefit is that he will not have to go through the waiting period.

At his age, you can start with a health cover of Rs1 lakh, which can be gradually increased to cover inflation and additions in his family. All policies will cover him up to 80 years of age.

Rahul Aggarwal, director, Optima Insurance Brokers

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