What Are Co-Pay and Deductibles in Insurance Policies?

What Is Co-Pay?

Co-pay (also called co-insurance) is a fixed percentage of covered expenses that the insured person must pay at the time of service.

For example, if your policy has a 10% co-pay on a ₹2,500 doctor's visit, you pay ₹250 and the insurer covers the rest.

Co-pay provisions vary by policy. They may apply to:

• All hospitalisations under the plan
• Treatment at non-network hospitals only
• Specific regions or zones (e.g. Zone A vs Zone B cities)
• Pre-existing condition treatments

Policies with co-pay clauses typically have lower premiums than those without, all other factors being equal.

What Is a Deductible?

A deductible is the fixed amount the insured must pay out of pocket before the insurer begins to cover any costs.

For example, if your deductible is ₹500, you pay the first ₹500 of any covered medical expense. The insurer steps in only after that threshold is crossed.

Higher deductibles generally result in lower premiums — making them a useful tool for reducing your insurance costs if you are in good health.

Where Are Co-Pay and Deductibles Used?

Both provisions appear across multiple types of insurance in India:

• Health insurance — co-pay on hospitalisations or specific treatments
• Motor insurance — deductibles on own-damage claims
• Overseas travel insurance — deductibles on medical expense reimbursements
• Health top-up plans — deductible thresholds before top-up kicks in

Real Policy Examples

Co-Pay Examples

New India Assurance — Senior Citizens Mediclaim: Includes a 10% co-pay requirement for certain types of coverage.

Bajaj Allianz Health Guard: Policyholders covered under Zone B rates who receive treatment in a Zone A city must pay a 20% co-pay on the admissible claim amount. This does not apply to accident hospitalisations.

SBI General Health Insurance: Includes a co-pay clause for treatment at non-network hospitals.

Deductible Examples

TATA AIG Travel Guard: Applies a USD 100 deductible for accidental and sickness medical expense reimbursement for individuals aged 0.6 to 70 years with a sum assured of USD 50,000.

ICICI Lombard Health Booster (Top-Up Plan): Pays claims above ₹3 lakh. Policyholders choose from deductible options of ₹3, ₹4, or ₹5 lakh — with higher deductibles resulting in lower premiums. Sum assured options range from ₹5 lakh to ₹50 lakh.

What to Check Before Buying a Policy

Co-pay and deductible clauses can significantly affect how much you pay out of pocket. Before signing any policy, review the following:

• Does a co-pay apply, and to which services or hospitals?
• What is the deductible amount, and when does it reset?
• Are there caps on coverage for specific treatments or conditions?
• What is excluded from coverage entirely?

Always read the policy terms carefully. If anything is unclear, ask questions before you buy — not after a claim is filed.

Quick Summary

Term	What It Means	Effect on Premium
Co-Pay	A fixed % of covered costs you pay at the time of service	Higher co-pay = lower premium
Deductible	A fixed amount you pay before the insurer covers anything	Higher deductible = lower premium

For more details about insurance policies, get in touch with Navnit Insurance Broking Pvt Ltd today.