InsuranceFinancial Glossary
Co-payment
Definition
A fixed percentage of the claim amount that the policyholder must pay out of pocket. For example, a 20% co-payment on a Rs 5 lakh hospital bill means you pay Rs 1 lakh and the insurer covers Rs 4 lakh.
Why It Matters
Co-payment clauses significantly reduce your effective coverage. They are common in senior citizen policies and some budget plans. A policy with a low premium but a 20% co-payment may cost you more in a major hospitalization than a slightly more expensive policy with zero co-payment.