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What is copayment in health insurance?

Copay in health insurance is a clause, wherein the insured agrees to bear a specific portion of the incurred medical expenses. It is usually a fixed percentage of the claim amount, which the policyholder pays at the time of a claim.

Most of the senior special plans offer lower premium in comparison to standard plan but it comes with a trade off.

In senior citizen plans, the premium is lower than standard health insurance but there is a copayment option in these plans along with fixed sum insured as the sum insured is given under limits in senior citizen plans.

Some plans give you the option to pay higher premium to have no copayment obligation.

So how should one decide if one should opt for a plan with copayment.

It entirely depends on the financial capabilities of the policyholder. The health insurance with no copayment charges a little higher than copayments. If the premium doesn't come quite heavy on the pocket of the policyholder then they must take it without co payment as paying a higher premium is always cheaper than paying a hefty hospital bill.

There are also conditions in which the insurer will only issue a policy if you agree for copayment especially in cases of preexisting diseases.

A co pay is good to opt for if you suffer from chronic ailments. Insurers are more willing to issue insurances if they know that you will pay a part of a possible hospital bill.

The copay aligns the insurer and your interest completely. For example, you would also like to reduce your hospital stay to the minimum if you have a copay because you pay part of the bill. Had there been no copay you have less incentive to get discharged earlier

Source: Economic Times

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