Maximizing Your Benefits: Understanding the no-claim bonus in health insurance

What exactly is a no-claim bonus in health insurance, and how does it benefit you? A no-claim bonus is a feature that rewards you for not filing any health insurance claims in a policy year by receiving a portion of your annual premium back. Our guide breaks down how this bonus works.

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The concept of no-claim bonus in health insurance

Every health insurance plan is a contract of trust, a pact between the insurer and the policyholder. Within this pact, the no-claim bonus (NCB) shines as a beacon of mutual benefit. It’s a reward given to the policyholder for not filing any claims during a policy year, which signifies the insurer’s appreciation for maintaining good health and avoiding unnecessary claims.

The no-claim bonus in health insurance is more than just a token of appreciation. It’s an incentive for policyholders to adopt a healthier lifestyle and file claims only when absolutely necessary. This way, it cultivates a culture of mindful insurance use and promotes health consciousness among policyholders.

Whether there is a no-claim bonus and how it is structured depends on the chosen health insurance coverage and the company.

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The role of private health insurance in offering a no-claim bonus

Private health insurance plays a pivotal role in the healthcare sector, not only by providing tailored health coverage but also by incentivising policyholders through no-claim bonuses (NCB). The concept of no-claim bonus serves as a reward mechanism for individuals who do not file any claims during a policy year. This feature underscores the insurance industry's commitment to promoting health awareness and preventive care among its clients.

Financial Rewards for Policyholders

The No-Claim Bonus in health insurance manifests as a direct financial advantage for policyholders, in the form of reimbursements. This financial incentive serves as a tangible reward for policyholders who manage to avoid health claims, thereby fostering a sense of satisfaction and loyalty towards their insurance provider.

Promoting Preventive Health Care

When a health insurance company offers a no-claim bonus, they encourage policeholders to undergo periodic health check-ups. Because if they do so they maintain their no-claim status.

The no-claim bonus feature aligns with the broader objective of preventive healthcare by encouraging policyholders to take proactive measures in managing their health. This preventive approach not only aids in early detection and treatment of potential health issues but also aligns with the insurers' goal of minimising the incidence of claims, creating a win-win scenario for both parties.

Customisation and Flexibility

Private health insurers offer not only one health plan but various with different coverage, allowing for a degree of customisation and flexibility that caters to the diverse needs and preferences of their clientele. This flexibility ensures that policyholders can select plans that offer an attractive no-claim bonus terms in line with their health insurance goals, whether it's reducing their premium outlay or enhancing their coverage without extra cost.

What types of no-claim bonuses are there?

In private health insurance, there are two forms of no-claim bonus: the non-performance-related and the performance-related refund.

The guaranteed no-claim bonus

For the guaranteed or non-performance-related no-claim bonus in private health insurance, the insured must have either submitted no or only a few bills to the insurance company during a year. If this clause is included in the contract, the insured receives a refund of the premiums, regardless of the company's financial situation.

Whether there is a refund and how much it is depends on the chosen tariff. The calculation of the no-claim bonus in private health insurance is usually based on the actual health costs incurred during the insurance year. If you have used no or only minor medical services during this period and meet the conditions set out in the tariff, you can expect a reimbursement.

The calculation is usually based on a percentage of your paid insurance premiums and is measured in a certain number of monthly premiums or a fixed absolute amount. The amount of the no-claim bonus varies from insurance company to insurance company and can be different depending on the tariff.

The performance-related no-claim bonus

The performance-related no-claim bonus depends on the success of the insurance company. There is no guaranteed repayment for members of private health insurance. This is a voluntary monetary benefit of the health insurance companies.

The insurance companies use surpluses, known as provisions for premium refunds, to grant this type of refund. These provisions are formed from parts of the premium income and the interest income and serve as the basis for calculating the refund.

How does the no-claim-bonus in health insurance works in practice?

In private health insurance, the reimbursement of the no-claim bonus typically occurs in the second half of the following year. This implies that you shouldn't expect an immediate refund after a quarter or month without claiming any benefits. Instead, the insurance company accumulates data on your health expenses throughout the insurance year.

Once the year concludes, your no-claim bonus is calculated and paid out to you in the subsequent year. Importantly, there's no need for you to request this payment; it's processed automatically.

It's crucial to examine the specific payout conditions stipulated in your contract, as these may differ from one provider to another. Generally, the payment is made directly to your designated bank account, allowing you to easily access and utilise your refunded money.

Here is an example of how the no-claim bonus can benefit you financially:

Annual health costs that do not affect the no-claim bonus (preventive care according to statutory programs, professional teeth cleaning, vaccinations excluding foreign travel vaccinations); are covered.

400 €

Annual health costs that would affect the no-claim bonus (e.g., sick note, medication bills); voluntarily paid for*

150 €

First Class Pro+ no-claim bonus (1 monthly contribution - statutory surcharge, sick pay, nursing care, contribution relief component)

549 €

Your financial advantage (no-claim bonus - personally paid bills)

399 €

*If you pay for these invoices yourself, they will not have a negative impact on your no-claim bonus and you will receive the full amount back.

Tax implications of the no-claim bonus

Generally, you can deduct health and long-term care insurance premiums as special expenses on your tax return, potentially leading to tax savings. However, the tax authorities only consider the insurance premiums you've actually paid. Thus, any no-claim bonus received from your insurance must be offset against the premiums paid in the year you receive the bonus.

As a result, the tax benefits might be reduced by the amount of the no-claim bonus, making it potentially less advantageous to pay treatment costs out of pocket.

Therefore, it's wise to factor tax considerations into your decision-making process regarding the no-claim bonus. It may also be beneficial to seek professional tax advice to ensure the most financially sound decision is made.

Choosing a health plan with a no-claim bonus: essential tips

When navigating the complex world of health insurance, selecting a plan that aligns with your needs is paramount. For those considering a plan featuring a no-claim bonus (NCB), understanding the nuances of this benefit can significantly enhance the value of your coverage. Here's a comprehensive guide to assist you in making an informed choice regarding health insurance plans that offer no-claim bonus, specifically within the realm of private health insurance.

Verify no-claim bonus availability

First and foremost, it's imperative to ascertain whether the health insurance plan under consideration includes an no-claim bonus feature. Since not all plans come with this benefit, a thorough examination of the health insurance tariff details is essential. This initial step ensures that you're not overlooking a crucial aspect of your potential health coverage.

Understand the no-claim bonus conditions

Delving deeper into the health insurance policy, it's vital to comprehend the specific conditions attached to the no-claim bonus. These conditions can vary widely among different private health insurance providers. Key factors to scrutinise include the percentage increase of the cumulative no-claim bonus for each claim-free year, the maximum limit to which the no-claim bonus can accumulate, and any stipulations that might affect its applicability.

Evaluate plan features

In addition to the no-claim bonus, other policy features demand your attention. Assess the adequacy of the coverage in terms of medical expenses, scrutinise any waiting periods that apply before certain conditions are covered, and understand the extent of the policy's cumulative no-claim bonus increase and its ceiling. These elements are critical in evaluating whether the insurance plan meets your health care needs and financial preferences.

Weigh premiums against benefits

An essential part of choosing the right health insurance plan involves balancing the cost of premiums against the benefits provided, including the no-claim bonus. A plan that offers a significant no-claim bonus might come with higher premiums, so it's important to determine whether the long-term savings through the no-claim bonus justify the initial cost.

Review the claim process

Understanding the claim process is crucial. Ensure that the procedure for filing a claim is straightforward and not encumbered with unnecessary complexities. A cumbersome claim process can detract from the benefits of an no-claim bonus, making accessibility to your entitled benefits more challenging. The fully digital claims process via the ottonova app makes this as easy as possible for you.

Seek expert advice

Finally, consider consulting with insurance experts or financial advisors. Their insights can help clarify any uncertainties and aid in comparing different plans more effectively. Expert advice can be invaluable in navigating the intricacies of health insurance policies and making a decision that best suits your individual needs.

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Espen Markus Mjøs
HIER SCHREIBT Espen Markus Mjøs

Espen Markus - originally from Norway - is sales agent in ottonova's English sales team. He's in contact with potential customers every day and answers Expats' questions about German health insurance.

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HIER SCHREIBT ottonova sales experts

Our ottonova team of experts has over 40 years of experience in private health insurance and answers questions about it every day. What are old-age provisions and for whom does private health insurance make sense? What is the actuarial interest rate and which tariff is right for you? They know!

You can receive a no-claim bonus annually, provided you have a claim free year. The exact conditions vary depending on the insurance company rewards and the health insurance policy.

No, the amount of the no-claim bonus usually does not directly influence the amount of your future insurance premiums.

Under certain conditions, a refund may still be possible even if medical bills have been submitted to the private health insurance. In many private health insurance plans, for instance, preventative services do not affect the amount of the refund.

Some policies offer a partial no-claim bonus, even if minor services have been utilised. This depends on the specific conditions of your health insurance policy. It's worth inquiring directly with your insurance company regarding this matter.

The payout of the no-claim bonus typically occurs in the second half of the following year. For more precise information, you should contact your health insurance company directly.

Yes, your insured family members can also benefit from the no-claim bonus, provided they have not made any claims either. The exact conditions depend on the health insurance policy.

In some health insurance policies, the amount of the no-claim bonus (NCB) does increase for each consecutive year you stay healthy and make no-claims.

This means that for every claim-free year following the previous policy year, the NCB percentage you are entitled to may increase, rewarding you for maintaining your health and not making any insurance claims.

The specifics, such as how much the NCB increases each year, can vary depending on your insurance provider and the terms of your policy.

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