Health Insurance No Claims Discount

Claims Discounts (NCD's)have been around in insurance for quite some time but they are fairly new to private medical insurance. Are they useful to the consumer, providing them with lower premiums if they don't claim or are they a something that medical insurance companies have developed in order to stay competitive?

Standard Life Healthcare, the UK fourth largest health insurer, were the first to introduce NCD bonuses but opinion is very varied with some vehemently opposed to it, including those within the industry. The main complaint about no claims bonuses is that they may put people's health at risk. If you are concerned about loosing your no claims bonus you may not seek medical advise if you have concerns about your wellbeing. This could endanger your health.

In a study published by CS Healthcare last week it was reported that 70% of respondents said they would think twice about claiming if it meant they would loose their NCD.

David Royle, the chief executive of CS Healthcare said that “Many people turn to private medical insurance for peace of mind, knowing that they will have access to the best clinicians, quickly and that costs will be met by the provider.

To then not claim for fear of losing a NCD doesn’t make sense and runs counter to the very reason people take out health insurance in the first place.

We are fundamentally opposed to NCD and do not offer them on any of our products. We are here to provide peace of mind and the very best care and service to our customers if and when they need it. ”

CS Healthcare offer health insurance services for those who work for the public sector, civil service and charitable or not-for-profit organisation.

On the other hand you could argue that NCD's mean that those people who do not claim because they have not needed to feel that they are getting something back. It might make you feel better about paying for all those premiums month after month when you are in perfectly good health.

No Claims Discounts were introduced a couple of years ago when people were moving away from private health insurance as their satisfaction with the NHS increased. It was a way to make policies more appealing. PruHealth takes this to another level with a whole reward scheme. 'Vitality points' offered for improving your lifestyle and taking active measures to be more healthy and active.

There is a great deal of competition for your pound out there and lots of NCD offers. Standard Life is offering up to 65% No Claims Discount if you are transferring from another policy where you have made no claims. Their entry level for a new customer is up to 35% no claims bonus with the chance to get up to a maximum of 50% if you stay with them and do not claim.

The drawbacks of NCD policies that if you do claim a few times within the first few years you will then be down to a premium level much higher than the one you joined at. Furthermore the 50% claims can be misleading as companies also offer you an discounted entry level when you first join them anyway so your percentage discount may only be as little as 35%. Additionally the zero rate NCD premium may also be higher than the premium on a standard policy.

It is important to check the details of zero discount policies compared to no claims discount policies to make sure you are in fact getting value for money. It may be something to take on board more if you are young and fit and have a low risk of making any claims.