Co-Pay
Co-Pay: What is a Co-Pay(in an insurance context)? Meaning, Example and FAQs
What is a Co-pay in insurance: A percentage of the claim amount that the insured must pay, the rest is paid by the insurer.
Why do insurance policies include a Co-pay clause: Shares risk between insurer and insured to reduce overuse.
How does a Co-pay work during medical treatment or claim settlement: Insured pays a percentage of the loss after deductible.
Who has to pay the Co-pay amount in an insurance claim: Policyholder, insurer
Which types of insurance policies commonly have a Co-pay feature: Health, Property insurance
When does a policyholder need to pay the Co-pay amount: At claim time
Case Study: Background: Mr. Ramesh Iyer, a 65-year-old retired government employee from Chennai, has a senior citizen health insurance policy with a sum insured of ₹5 lakh. To make the premium affordable, he chose a plan with a 20% co-pay clause. Incident: Last year, Ramesh was hospitalized for knee replacement surgery. The total hospital bill was ₹4 lakh. Outcome: As per the co-pay condition, Ramesh had to pay 20% of the claim amount out of his own pocket, and the insurance company paid the remaining 80%. So, he paid ₹80,000 himself, while the insurer settled ₹3.2 lakh directly with the hospital. Key Insight: A co-pay (or co-payment) means the insured agrees to bear a fixed percentage of each claim amount. In India, co-pay is common in senior citizen health plans or policies for high-risk individuals, helping insurers manage claims costs while offering affordable premiums.
