Difference between Co-Payment And Deductible
- Author :
- TATA AIG Team
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There is perhaps nothing as precious as one's health and well-being and nothing that is as fragile either. In a world where there is no dearth of diseases, infections, and other health-related risks, it is incredibly important to have a suitable health insurance policy.
It is easy to choose the best medical policy for yourself. All you need to do is visit our official website and peruse our health insurance plans. There are several benefits of health insurance, amongst which are a hospitalisation cover, a critical illness cover, and an ambulance cover. Having critical illness insurance adds an additional layer of financial protection to your health insurance policy. Whilst buying a health insurance policy, it is easy to get confused between terms that seem synonymous but are not. For instance, terms such as copayment and deductible, which are commonly mentioned in health insurance plans, have different implications.
What Is Deductible In Health Insurance?
As its name suggests, a deductible is a fixed amount that acts as the trigger point for your health insurance policy. To put it simply, it is the minimum amount that your medical expenses must reach in order for you to be able to avail yourself of the benefits under your health insurance plan.
Let us understand the concept of deductible in health insurance with the help of an example. Ms Naina has a health insurance policy with a sum insured of ₹1,00,000 and a deductible of ₹5,000. This means that she will be able to utilise the benefits of her health insurance policy only if her medical expenses exceed ₹5,000.
For claims that fall short of this ceiling of deductible, Naina has to bear the cost of the medical expenses. If, however, the total medical expenses are higher than the deductible determined at the time of the purchase of the health insurance policy, say ₹10,000, Naina can file a claim for ₹5,000 after paying the deductible (₹5,000) from her pocket.
Here Are Some Significant Facts About Deductibles In Health Insurance
- Deductibles are fixed at the point of purchase or renewal of a health insurance policy;
- The lower your health insurance deductible, the higher is your health insurance premium, and vice versa;
- Deductibles protect insurers from small and regular health insurance claims.
What Is Copay In Health Insurance?
Copay is another term frequently used in the context of a health insurance policy. As is evident from its name, a copay in health insurance is the amount of your health insurance claim that you have to pay. The notion of copayment finds its genesis in the sharing of the burden of health insurance payments between the insurer and the insured.
The copay aspect of your health insurance policy can be either in the form of a fixed sum or a fixed percentage of the sum insured under the plan. Let us understand the concept of copay in health insurance with the help of an example. Mr Aalekh has a health insurance policy with a sum insured amounting to ₹1,00,000 and a copay of 10 per cent.
Whilst filing a health insurance claim on the above policy, 10 per cent of the total claim amount shall have to be borne by Aalekh whilst the remaining 90 per cent shall be paid by the insurer. For instance, if the health insurance claim is for ₹50,000, then Aalekh shall copay it to the tune of ₹5,000, and the insurer will pay the remaining amount, that is, ₹45,000.
Here Are Some Significant Facts About Copay In Health Insurance
- The fixed sum or the percentage of copay in health insurance is determined at the time of purchase or renewal of the plan;
- The higher your health insurance copay amount, the lower is the health insurance premium you have to pay, and vice versa;
- The maximum proportion of the copayment in a health insurance policy is generally undertaken by the insurer.
Copayment vs Deductible - Which is Better?
If you are wondering which is better - copay or deductible, then it is important to understand that they are two different concepts and have varying impacts on your health insurance policy. Here are the major differences between copay and deductible in a health insurance policy.
|Meaning||Copayment is the amount of your health insurance claim that you have to bear from your own pocket.||A deductible in health insurance is the fixed amount of money that your medical expenses must exceed in order for your health insurance plan to be usable.|
|Form||Copayment can be in the form of a fixed amount or as a percentage of the sum insured under your health insurance policy.||Deductibles in health insurance are usually in the form of a fixed sum.|
|Frequency||Copayment has to be paid every time you use your health insurance policy for availing of cashless insurance or filing a reimbursement claim.||A health insurance deductible is counted for an entire policy year. Once you have met the ceiling of the medical expenses in accordance with your health insurance deductible, you can use your health insurance plan without having to account for deductibles for every claim.|
|Scope||Copayment is usually included in specific types of health insurance policies, for instance, Senior Citizen Health Insurance Plans and Critical Illness Insurance Plans.||A health insurance deductible is usually a part of most health insurance policies to add a layer of protection for the health insurance provider against claims that are of very small amounts.|
To Sum It Up
Although both copay and deductible in health insurance lead to a reduction in your health insurance premium, they simultaneously enhance your own financial exposure to your medical expenses. Therefore, it is important to understand the minutiae of these concepts and be mindful of them whilst selecting a health insurance policy. Further you can also check our compare health insurance resource to understand how to pick the right health insurance plan for your and your family - be it an individual health insurance or a family health insurance plan.
You can check out Tata AIG's health insurance plans on our website and study the policy wordings to understand various important clauses, including the ones for health insurance copayment and deductible.
Disclaimer / TnC
Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.