Are you planning to buy health insurance and came across a co-payment term. Do you have to know what it is? How does it work? And whether opting it would be a good decision or a bad decision? Hard to figure out what should be picked! Insurance policies come with a number of terms and conditions. It is hard to figure out what kind of policy would be good for you and what are the hidden conditions are in this policy. You need to be good in match to understand how it works.
What is co-pay?
A co-pay is a provision in your health insurance policy that requires both the insurer and the insured to contribute the total acceptable claim amount. Co-pays are frequently charged by insurance companies for services such as doctor visits or prescription medicines. The insured pays a percentage of the claim, and the insurer settles the rest. The smaller the policy premium, the larger the co-payment amount, and vice versa. Co-pays are a fixed actual amount paid at the time of service rather than a percentage of the bill. A copay is not required for all medical services.
How it works and why it is not good for your pocket?
Let's say the policy agent sells a policy with total coverage of Rs 5 lakhs for just Rs 7000 per year. But then he adds even more sugar to the mix. If you agree to a 20% co-payment clause, he pledges to reduce the premium by 25% that is Rs 1750 each year. You think that's fantastic and agree to sign the contract. You've just saved Rs 1800, you're thinking.
You have an accident a year later. You've been admitted to the hospital and will require a lot of attention. Thankfully, you recover completely and the cost totals Rs 2 lakh. There isn't an issue. You're covered by insurance. The insurance, on the other hand, only pays $160,000. Since you agreed to co-pay 20% of the price, they require you to pay the rest 40,000 out of pocket.
Now, try to figure out what's going on. You saved Rs 1,750, but the co-payment condition required you to pay Rs 240,000.
Why should you avoid co-payment in health insurance?
Co-payments are rarely a good idea unless they're necessary or you're purchasing them for an elderly person with pre-existing ailments. In this case, a co-payment provision can help you save a lot of money on your premiums.
If you need assistance choosing the correct policy, schedule a free consultation call with one of our consultants today.
Research before buying a policy
Adequate health insurance protects you in the event of a medical emergency. Furthermore, you will receive better services at a lower cost. However, understanding the many provisions of your health insurance policy, particularly the copays and deductibles, is critical.
These clauses do not mean that if you purchase health insurance, you will be covered for all of your medical bills. They also don't say that if you get an insurance policy, it will start paying off immediately away. The insured will be better able to make an informed decision if they are aware of these clauses.