When it comes to purchasing health insurance, there are a few phrases you should understand that can be quite
An unaware person can get confused easily when it comes to insurance terms like co-payment and deductibles. Both
co-payment and deductibles are examples of cost-sharing. It implies that you will have to pay a portion of your
healthcare expenses, while the insurer will pay the balance. They both sound similar, aren’t they? But
there’s a difference between these two terms. Let’s understand.
Copay refers to when policyholders need to bear a specified portion of their medical care costs while the insurer
bears the balance. This might be a fixed sum or a fixed percentage of the treatment costs.
For example, if your insurance coverage has a copay clause of Rs. 5000 for treatment expenses and the treatment
costs Rs. 25,000, you will be expected to pay Rs. 5000 toward your treatment, with the insurer covering the
remaining Rs. 20,000.
Similarly, if the copay clause demands you to bear 10% of the total cost incurred, you will be expected to pay Rs.
1000, with the insurer covering the balance of 90% (Rs. 9000).
Below are the features of co-payments:
Deductibles are a fixed amount of money that policyholders need to pay before their insurance coverage begins to
contribute to their medical treatment. The insurance provider decides whether deductibles are paid annually or per
For example, if your policy has a deductible of Rs. 5000, you would be expected to pay for treatment expenses up to
Rs. 5000 before your insurance policy kicks in.
Below are the features of deductibles:
Whilst co-payment and deductibles in health insurance lower your health insurance premium, they also increase your
financial exposure toward medical expenses. Therefore, it is important to understand the complexities of these terms
and keep them in mind while choosing health insurance coverage.
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