In a move that impacts long-term subscribers of medical insurance policies, leading insurers like Oriental Insurance Company and United India Insurance have stopped no-claim bonus for existing and new policy holders.
In fact, existing policy holders may have to shell out more if the bonus cover, which they were earlier getting free of cost, is added to the total sum insured while renewing policies from April this year.
The change affects about 44 lakh (Rs 4.4 million) policyholders of these two firms, who together have a 27 per cent share of the Rs 3,200 crore (Rs 32 billion) health insurance market, according to 2006-07 data.
Policy holders of these companies used to get up to 50 per cent of the sum insured cumulatively as bonus if they did not make any claim. In effect, if a policy holder had taken a cover of Rs 1,00,000, he could earn an additional cover of up to Rs 50,000 free of cost.
"Instead of giving cumulative bonus to the existing policy holders, we have either reduced the premium or added the bonus to the sum insured," an Oriental Insurance official said. There had been complaints that excessive bonus was being given, he added.
The bonus system has been discontinued in case of fresh policies issued this year by Oriental Insurance. Similarly, United India has stopped giving bonus. But the company is giving 5-25 per cent discount on the premium if there are no claims.
Private player Reliance General is also giving only discounts on the premium and no bonus on the sum insured.
