Difference between co-pay and deductible in a medical insurance policy

With the rising cost of healthcare every year, there has been an increase in the number of people who are purchasing medical insurance policy, both online and offline. The health insurance policy helps in coping with this increased cost of healthcare, especially for those who are not able to afford it easily during medical emergencies.

However, when you are buying family health insurance for the very first time, there are many technical terms that could possibly confuse you. It is better to have prior knowledge of such terms in order to avoid being misled when buying the policy. Two such terms are co-pay and deductible. Given below is everything about copay and deductible, and the difference between the two:

1. What is Co-pay?

Co-pay is an amount that the policyholder has to pay towards the claim settlement of the medical expense, with the rest of the amount being settled by the insurer. This amount can also be in the form of a fixed percentage. For example, if the cost of the medical treatment is Rs.50,000, and your co-pay share is Rs.10,000, then you will be required to pay that amount with the rest of the amount, i.e, Rs.40,000 being covered by the insurer.

Similarly, if you are required to pay a fixed percentage as co-pay, then you will be required to pay 20% of the settlement amount. The amount that you are required to give as co-pay will be agreed upon between you and your insurer when you are buying your family health insurance. Do keep in mind that you can keep opt for a higher co-pay variable in order to pay a lower premium.

2. What is a Deductible?

A deductible is the amount that you are required to pay as the policyholder before your medical insurance policy starts to cover the cost of your medical expenses. For example, if you are required to pay Rs.30,000 as a deductible before your policy kicks in, then you will be required to pay for any medical treatment that you take. So, if the amount of your treatment is Rs.15,000, then you will have to pay that amount out of your pocket.

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