InsuranceFinancial Glossary
NCB (No Claim Bonus)
Definition
A benefit offered by insurers for each claim-free year. In health insurance, NCB typically increases the sum insured by 10-50%. In motor insurance, NCB gives a premium discount of 20-50%. The bonus resets partially or fully if you file a claim.
Why It Matters
After 5 claim-free years, your health insurance sum insured can effectively increase by 50-100% at no extra cost. This is why filing small claims (below Rs 10,000-20,000) is often financially counterproductive — you sacrifice years of accumulated NCB for a minor reimbursement.