InsuranceFinancial Glossary
Co-insurance
Definition
An arrangement where the policyholder shares a percentage of the claim cost with the insurer after the deductible is met. Similar to co-payment, but co-insurance typically applies to a broader range of expenses. A 20% co-insurance clause means you bear 20% of every eligible claim amount.
Why It Matters
Co-insurance and co-payment are often confused but function similarly in practice. Both reduce your effective coverage. A policy with 20% co-insurance on a Rs 10 lakh claim means you pay Rs 2 lakh out of pocket. Always check whether co-insurance applies across all claims or only specific categories.