Cumulative bonus for every claim free year. the sum insured gets increased on renewal by a fixed percentage say 5% annually and is allowed up to a maximum of 50% for ten claim-free renewals. The insured pays the premium for the original sum insured and enjoys a higher cover.
Cumulative bonus can be provided only on indemnity based health insurance policies and not benefit policies (except PA policies).
Malus - if the claims under a policy are very high, a malus or loading of premium is collected at renewal. malus is not charged on individual health policies as of now
In case of group policies, the malus is charged by way of loading the overall premium suitably to keep the claim ratio within reasonable limits. On the other hand if experience is good a discount in premium rate is allowed which is turned as Bonus.
As per IRDAI guidelines, a 30 days grace period is allowed for renewal of individual health policies.
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