Say no to Co-Payment?

You’re about to buy health insurance. The agent pitches a policy with a cover totaling 5 Lakhs for a bargain price of just ₹7000 a year. But then he sweetens the pot even further. He promises to cut down the premium by 25% (roughly ₹1800/year) if only you agree to a 20% co-payment clause. You think that’s amazing and you sign off on the agreement. Wow, you just saved ₹1800.

9 months later, you suffer an accident. You’re hospitalized and you need extensive care. Thankfully you make a full recovery and the bill adds up to ₹2 Lakh. No problem. You’ve got insurance. However, the insurer only pays ₹1,60,000. They ask you to pay the remaining ₹40,000 out of pocket since you promised to co-pay 20% of the bill.

You start doing the math. You saved ₹1,800 but you had to pay ₹40,000 because of the co-payment clause. It would take ~22 years worth of premium savings to make up for this fatal mistake. Not something you want in your insurance policy

Co-payments almost never make sense unless they are mandatory or you’re buying it for someone who’s old with pre-existing diseases. In which case a co-payment clause can bring down premiums drastically.

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