Should you opt for the co-payment in your health insurance?


Nanda Kishore, 50, was surprised when asked to pay 20% of the hospital bill for her mother’s illness. Covered by an insurance policy, he thought everything would be taken care of by the insurance company. “I was not prepared to pay the amount because I thought our health insurance policy would cover the bill. I later learned that the policy had the cost sharing feature that we had overlooked when purchasing the policy.

There are many like Nanda who agree to pay less premium instead of the co-pay feature without understanding the implications. Co-payment is a contract in which you agree to pay a certain percentage of the medical costs out of pocket and share the burden of the medical costs. For example, if your hospital bill is Rs 1 lakh, your health insurance policy will only cover Rs 80,000 with the rest to be paid out of your pocket.

Should we opt for the co-payment?

Ideally, you should not opt ​​for the co-payment function. But if it is difficult to pay the premium, co-payment is a better option than not buying coverage at all. In addition, the user fee may be suitable for seniors, as contribution rates are higher in old age.

“The user fee is a good way to regulate the cost of the premium. While co-payment helps reduce premium prices and ensures affordability, but in return for this the policyholder has to pay exorbitant hospital expenses from their own savings. Thus, user fees should be avoided or limited in order to bear the least amount of hospital costs, ”said Naval Goel, founder and CEO of

He adds: “The policyholder can choose the quota by assessing his health and financial situation as they are today and should be during the course of the health policy. If they can afford it, paying a higher premium now can save the policyholder in the long run.

Graphic: Pragati Srivastava

Impact on the premium

Since the insured must pay the percentage of the hospital bill, premium rates tend to be lower for health insurance policies with a co-pay feature. The percentage depends on the percentage of co-payment chosen. “The copayment usually makes a difference of 20 to 25% in the premium rates varying depending on the plan and the age of the policyholder,” Goel explains.

Co-payments should not be considered for the purpose of reducing your premium rates. However, if it is difficult to pay a premium, it is better to opt for a cost-sharing option than not having a health insurance policy.

Read also: Guaranteed insurance emerges as the preferred choice of policyholders

Also read: LIC Launches New Savings Life Insurance Plan; view details


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