What is Cumulative Bonus in Health Insurance

You have invested in health insurance, but are you aware of all its hidden perks? What if your policy could actually expand its coverage over time, simply because you're staying healthy? Many policyholders overlook a key benefit designed to do just that: the Cumulative Bonus (CB).

According to the IRDAI, over 80% of policyholders in India don’t fully use their health cover each year, even as premiums keep rising. That’s where the Cumulative Bonus comes in, offering you increased coverage year after year, without extra cost, just for not making a claim.

Understanding how CB works can help you unlock hidden value in your policy. Let’s break it down and show you how to turn your insurance into more than just a safety net.

Your health insurance can become much more than a basic safety net against rising medical costs if you know how to leverage this feature. Let's dive into what is Cumulative Bonus in health insurance, understand how it works and how it can give you more coverage without paying higher premiums.

Pro tip: The health insurance market can be a labyrinth. Instead of spending hours navigating through the hundreds of policies out there, why not book a 30-minute call with our expert IRDAI-certified advisors? We don’t spam or pressure you to buy. Just honest insurance advice.

Cumulative Bonus in Health Insurance: An Overview

What is Cumulative Bonus in Health Insurance?

Cumulative Bonus (CB) is a value-added feature offered in many health insurance plans. This rewards policyholders by increasing their sum insured (the amount your insurance covers) over time and the increase typically happens every year.

Think of it as a loyalty benefit or a performance reward. Your insurer gives you more coverage either for maintaining your policy over time or for avoiding claims, depending on the type of CB.

Importantly, no extra premium is charged for these annual increases. However, the total bonus that can accumulate is usually capped, often up to 100% to 500% of the base sum insured, depending on the policy.

Cumulative Bonus in Health Insurance: Types Explained

There are two main types of cumulative bonuses. Understanding them can help you choose a plan that fits your needs better.

Table: Claim-Based vs. Renewal-Based Cumulative Bonus: A Quick Comparison

5.1 Claim-Based Bonus

(Also called No Claim Bonus or Traditional Cumulative Bonus)

This is the most common type of cumulative bonus in health insurance.

• How it works: You receive this bonus only if you don’t make any claims during a policy year. For each claim-free year, your base sum insured increases by a fixed percentage as a reward.
• Bonus Cap: The bonus usually stops building after reaching 50% to 100% of your original cover.
• Premium Impact: No extra premium is charged for the bonus; it’s a free benefit.
• What to Watch Out For: If you make a claim, the bonus might reset to zero or reduce in the same proportion it was given, depending on your policy.
• Ideal For: Healthy policyholders who don’t need to claim often. It’s great for younger people or those with minimal health risks.

5.2 Renewal-Based Bonus

(Also called Guaranteed Cumulative Bonus or Loyalty Bonus)

This is a newer and more flexible version of cumulative bonus in health insurance. It adds bonus coverage every year at renewal, no matter whether you made a claim.

• How it works: The bonus is guaranteed as long as you renew the policy on time. Claims don’t affect it. You still get the same percentage increase every year.
• Bonus Cap: Some plans offer higher caps, up to 100% to 500% of the base cover.
• Available In: Modern health plans like Care Supreme, HDFC Optima Secure, and Aditya Birla Activ One.
• Ideal For: People who may make small or regular claims, senior citizens, people with ongoing medical conditions.

Unlike claim-based bonuses, this type of cumulative bonus in health insurance does not reduce or reset after a claim. It offers more predictability and peace of mind.

Why Understanding the Types of Cumulative Bonus Matters

• Helps you know how your cover will grow over time
• Lets you choose between rewarding no claims vs. guaranteed growth
• Avoids surprises after a claim, especially if you are expecting your bonus to continue
• Helps match your policy to your health profile and budget

Top Health Insurance Plans in India That Offer Cumulative Bonuses

To shortlist the best health insurance plans that offer strong cumulative bonuses, we looked at how the bonus works, whether it's claim-based or guaranteed. At Ditto, we consider key company metrics like claim settlement ratios, customer reviews, and overall reliability. We also evaluated essential plan features such as wide hospital networks, comprehensive coverage, affordability, and ease of claim process.

1) HDFC ERGO's Optima Secure

HDFC ERGO's Optima Secure plan offers a valuable "Plus Benefit" that functions as a Guaranteed Cumulative Bonus. It provides a significant boost to your coverage irrespective of your claim history. Upon each successful renewal for the first two years, your original Sum Insured increases by 50% per year, effectively doubling your base coverage (reaching 100% of the original Sum Insured) after just two renewals. This means your coverage automatically grows without penalty for making claims. It offers enhanced and predictable financial security against rising medical costs.

2) Care Health Insurance's Care Supreme plan

Care Health Insurance’s Care Supreme plan offers a great way to enhance your health coverage over time. It includes an inbuilt cumulative bonus of 50% per policy year, up to a maximum of 100% of the base sum insured. Additionally, you can opt for the "Cumulative Bonus Super" add-on, which further boosts your sum insured by 100% each year, up to 500% of the base cover.

When combined, these benefits can increase your total sum insured by up to 600%. This offers significant value and long-term financial protection.

Also, this accumulated bonus remains unaffected even if you make a claim. It ensures your enhanced coverage is secure. This makes it an excellent addition for long-term financial protection against rising medical costs.

3) Aditya Birla Activ One Max

This particular policy features an exceptional "Super Credit" functioning as a highly attractive Guaranteed Cumulative Bonus. It grows your coverage without penalizing you for claims. For every year you renew, your Sum Insured automatically increases by 100%, regardless of whether you have made a claim in the preceding year.

This rapid accumulation continues until the total Sum Insured, including the bonus, reaches an impressive 500% (five times) of your original base Sum Insured. This provides good long-term protection against medical inflation, with an overall absolute maximum cap that can reach up to ₹3 Crore. This makes it an incredibly powerful tool for ensuring your health coverage keeps pace with future healthcare costs.

4) Niva Bupa Aspire Titanium + 

Niva Bupa Aspire Titanium+ includes an innovative No Claim Bonus feature known as the Booster+ benefit. This reward-based system tracks the unutilized portion of your base Sum Insured each policy year. Whatever amount remains unused is carried forward and added to your coverage for the next year. Over time, this allows your health cover to grow substantially, but only when there are no claims, making it a performance-linked bonus rather than a guaranteed one.

For instance, if you begin with a ₹10 lakh base Sum Insured and make a claim of ₹2 lakh, the remaining ₹8 lakh of your original cover is added to your next year's policy, giving you a total Sum Insured of ₹18 lakh (₹10 lakh base + ₹8 lakh bonus). This unique feature allows your total Sum Insured to accumulate. It potentially reaches up to 10 times your base Sum Insured, depending on your entry age. It offers strong, long-term financial protection by rewarding prudent claims usage.

To get a complete overview of the top policies, their key features, and who they’re best suited for, read our comprehensive article featuring the best health insurance plans in India 2025.

Benefits of Cumulative Bonus in Health Insurance: Growing Your Protection Over Time

Let’s have a quick summary of the benefits:

A cumulative bonus (CB) in health insurance is a fantastic feature that rewards you for being a responsible policyholder, primarily by increasing your sum insured. This isn't just a perk; it's a strategic tool that enhances your protection as the years go by. Let’s break down its key benefits:

1. More Coverage Without Paying More

Your sum insured grows every claim-free year without increasing your premium. This means you get additional coverage for free, making your policy more valuable. Especially if you're healthy and avoid claims (for claim-linked CB) or simply renew on time (for guaranteed CB).

2. Shields You From Medical Inflation

Healthcare costs are rising fast. A cumulative bonus automatically boosts your coverage, helping your policy keep pace with treatment and hospitalization expenses, without requiring you to pay extra or upgrade manually.

3. Encourages Healthy Choices (Claim-Linked CB)

Claim-linked CBs reward you for each year without a claim by increasing your sum insured. This encourages you to:

• Maintain a healthy lifestyle to avoid hospitalizations.
• Skip small claims and save your insurance for major medical needs, preserving your bonus.

4. Stronger Financial Protection Over Time

Over the years, your CB can significantly increase your total coverage, often up to 100% or more, depending on the plan. This offers a stronger safety net for serious or long-term illnesses, especially as you age.

5. Ideal for Seniors and Families (Guaranteed CB)

Guaranteed CB is perfect when claims are more likely, such as:

• Senior citizens, whose coverage keeps growing even after claims.
• Families, where a bonus continues accumulating even if one member uses the policy, ensuring broad, uninterrupted protection.

6. Bonus Isn’t Lost After a Claim (Guaranteed CB)

With guaranteed CB, your accumulated bonus won’t reset even if you make a claim. You continue to build coverage year after year, providing peace of mind and policy stability.

7. Boosts Policy Value & Rewards Loyalty

CB enhances the overall value of your health insurance, acting as a reward for staying healthy and renewing consistently. It’s also a smart retention tool for insurers, encouraging long-term relationships by offering tangible, growing benefits.

How Cumulative Bonus in Health Insurance Works (With Examples)

A Cumulative Bonus (CB) is a way for your insurance coverage (Sum Insured) to increase over time without you paying a higher premium for that increased coverage. However, how it increases and what happens if you make a claim depends on the type of Cumulative Bonus your policy offers. Let us understand how each cumulative bonus type works with examples.

1. Claim-Linked Cumulative Bonus (Traditional Bonus)

Example: Original Sum Insured: ₹5 Lakhs, CB: 10% per claim-free year

2. Guaranteed Cumulative Bonus (Non-Claim Dependent CB / Loyalty Bonus)

Example: Original Sum Insured: ₹5 Lakhs, Guaranteed CB: 10% annually

Key Learnings from These Examples:

1. Claim-Linked Bonus is Conditional: The biggest takeaway for a Claim-Linked Bonus is that your bonus only grows if you avoid making claims. As soon as you make a claim (even a small one, like in Year 3 of the example), your accumulated bonus typically is clawed back in the same proportion.
2. Guaranteed Bonus is Resilient: A Guaranteed Bonus, on the other hand, is much more robust. Your Sum Insured continues to increase year after year, even if you make claims (as seen in Year 2 and Year 3 of the example). This provides consistent growth in your coverage regardless of your health events.
3. Know Your Policy Type: It's crucial to understand which type of Cumulative Bonus your policy offers. Most insurers mention and give examples of how the bonus accumulated in their bonus or prospectus. This knowledge directly impacts how your coverage will behave, especially after a claim, and helps you set realistic expectations for your long-term health insurance strategy.

Things to Consider Before Buying a Policy with a Cumulative Bonus

When choosing a health insurance policy that offers a Cumulative Bonus (CB), it's important to look beyond just the promise of increased coverage. Here are key factors to consider to ensure you pick a plan that genuinely benefits you in the long run:

1. Understand the Type of Cumulative Bonus Offered: The most crucial distinction lies here. Some policies offer a Claim-Linked (Traditional) Cumulative Bonus, where your accumulated bonus (increased sum insured) will reset or reduce if you make even a single claim during a policy year. This type is less predictable if you anticipate any medical expenses. 
   
   In contrast, a Guaranteed (Non-Claim Dependent) Cumulative Bonus is added every year upon timely renewal, regardless of whether you made a claim. This variant offers far greater certainty and continuous growth of your coverage, making it generally more reliable for long-term health planning, especially for families or older individuals.
2. Evaluate the Bonus Accumulation Rate: The percentage at which your Sum Insured increases each year due to the CB can vary greatly between policies and insurers. Some policies might add just 10% for each claim-free year or renewal, while others could offer 50 to 100% or even higher. A higher accumulation rate means your overall coverage will grow much faster, providing a larger safety net against future medical costs in a shorter period.
3. Check the Maximum Cap on Cumulative Bonus: While a cumulative bonus helps your Sum Insured grow, almost all policies have a maximum limit or "cap" on how much this bonus can accumulate. This cap is often a percentage of your original Sum Insured, for example, limited to 50% or 100% of the initial coverage. Once your Sum Insured reaches this maximum cap, it will not increase further through the cumulative bonus, even if you continue to have claim-free years or renew your policy. Understanding this cap helps you set realistic expectations for your policy's long-term growth.
4. Know How Claims Affect Your No Claim Bonus (NCB)
   Understanding how your health insurance handles claims is crucial, especially if it offers a No Claim Bonus. Some policies reset the entire accumulated bonus if a claim is made, while others apply a partial clawback, reducing the bonus in the same proportion it was awarded. This distinction matters when evaluating long-term value. If you have a guaranteed bonus feature, ensure that it remains unaffected by claims, allowing your Sum Insured to grow without interruption.
5. Understand the Policy Renewal Terms: The cumulative bonus in health insurance is typically applied and added to your Sum Insured when you renew your policy. If you fail to renew your policy on time, you might not only lose coverage but also forfeit any accumulated cumulative bonus from previous years. Always ensure timely renewals to secure your enhanced Sum Insured.
6. Inquire About Portability of Cumulative Bonus: If you decide to switch your health insurance policy to another insurer (a process known as porting), you might be able to transfer your accumulated cumulative bonus. However, this is not always guaranteed, and the new insurer might have different terms regarding the bonus transfer or their own CB structure. Always confirm with the new insurer how your existing cumulative bonus will be treated during portability, as it can impact your continuous coverage level.

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Final Thoughts

When choosing a right health insurance plan, it’s important to look beyond just the premium. A cumulative bonus in health insurance can boost your coverage over time, without raising your costs. If you stay healthy or consistently renew your policy, it’s a smart way to get more value from your plan.

Renewal-based bonuses offer more predictability, especially for those who may need frequent medical care, while claim-based bonuses reward low claim activity. That said, a cumulative bonus should be seen as a valuable add-on, not a replacement for a strong base sum insured. Always ensure your base cover is high enough to meet major medical needs, and let the bonus be the cherry on top.

FAQs on Cumulative Bonus in Health Insurance