Co-insurance: If you also want comprehensive coverage and financial security for the huge medical expenses, then co-insurance can prove to be helpful.
In view of the ever-increasing inflation and the huge expenditure on treatment, health insurance has become extremely important for people. Its importance has increased further after the Corona period. It not only helps in challenging situations like medical emergency but also provides financial security from hospital expenses.
If you too want comprehensive coverage and financial security for the huge medical expenses, then co-insurance can prove to be helpful. This is a concept in health insurance, in which the cost of treatment expenses is shared among multiple insurance companies.
It is different from co-payment
- Co-insurance is different from co-payment. In co-payment, the policyholder has to pay a fixed percentage of the medical bill, while in co-insurance, the burden of the policyholder’s medical expenses is shared between two or more insurance companies.
- This arrangement divides the financial risk and provides broader coverage for high-value insurance or large medical claims.
Risk assessment is already done between companies
- Under the co-insurance concept, each insurance company takes a part of the risk. This means that they will be liable to pay a fixed share of any claim made under the policy. The percentage of risk that will be taken from each insurance company is decided in advance.
- Under the pre-determined system, insurance companies pay the medical expenses as per their respective shares.
Understand this with an example Suppose, two insurance companies are involved in a health insurance policy. The first company covers 60 percent of the risk and the second company covers the remaining 40 percent. If the cost of treatment is Rs 1 lakh, then the first company will pay Rs 60,000 and the second company will pay Rs 40,000.
