When a hospital bill arrives, the policy wording decides how much the insurer pays — and how much you must still pay.
Three clauses are the most common and the most dangerous unless you understand them: co-pay, deductible, and sub-limits (plus related room-rent / proportionate deductions). Below is a practical, deeply-detailed guide with real examples so you never get caught by surprise.
All three can stack and create large out-of-pocket payments unless you check them carefully.
Definition: A co-payment (co-pay) is a percentage (or sometimes a fixed amount) of the admissible claim that the insured must bear at claim settlement. It does not reduce your sum insured. (Regulatory definition: IRDAI).
Example —
Definition: A deductible is a fixed amount the insured must pay before the insurer begins to pay for a claim. Deductibles can be annual, per-claim, per-family (aggregate), or voluntary (you choose it for lower premium).
Common types -
Example 1 — simple deductible
Policy: deductible ₹25,000 (voluntary)
Hospital bill = ₹85,000
You pay the first ₹25,000 → remaining ₹60,000 eligible
If no co-pay: insurer pays ₹60,000.
Example 2 — deductible + co-pay (combined)
Policy: deductible ₹25,000 + co-pay 10%
Hospital bill = ₹1,20,000
Step 1: you pay deductible ₹25,000 → balance ₹95,000
Step 2: co-pay 10% on approved balance: 10% × ₹95,000 = ₹9,500 (you pay)
Insurer pays: ₹95,000 − ₹9,500 = ₹85,500
Total you paid = ₹25,000 + ₹9,500 = ₹34,500.
(Always verify whether co-pay applies before/after deductible in the wording —
many policies apply deductible first, then co-pay on balance.)
How deductibles reduce premium (but increase risk): higher deductible → lower premium. Good for those who rarely claim and can afford the deductible. Bad if you need expensive care unexpectedly.
Definition: Sub-limits set a maximum payable amount for a specific treatment, procedure, or cost head (for example, cataract, knee replacement, room rent). The insurer will not pay beyond that limit even if your total sum insured is higher.
They mean: even if your sum insured is ₹5,00,000, you may have a ₹40,000 cap for cataract.
Common sub-limits
Example — sub-limit in action
Sum Insured = ₹5,00,000
Cataract sub-limit = ₹40,000
Actual cataract surgery cost = ₹1,20,000
Insurer pays = ₹40,000; you pay = ₹1,20,000 − ₹40,000 = ₹80,000.
How it works: If your policy caps room rent (say ₹5,000/day) and you choose a higher-priced room (₹10,000/day), the insurer can apply a proportionate deduction — not only on room rent, but also on associated costs (doctor fees, nursing, procedure charges). IRDAI specifically notes proportionate deduction rules in product design guidance.
Typical policy wording to look for
A commonly used practical approach (check your insurer’s wording — exact formula may differ):
Approved amount = Total eligible bill × (Room rent limit / Actual room rent) So ratio = (policy room-rent limit) ÷ (actual room rent).
Example — step-by-step
Policy sum insured = ₹5,00,000 → room rent limit 1% = ₹5,000/day.
Actual room chosen = ₹10,000/day. Ratio = ₹5,000 ÷ ₹10,000 = 0.5
Total hospital bill (eligible) = ₹2,00,000
Approved by insurer after proportionate deduction = ₹2,00,000 × 0.5 = ₹1,00,000
If the policy has no deductible/co-pay, the insurer pays ₹1,00,000; you pay the rest =
₹2,00,000 − ₹1,00,000 = ₹1,00,000.
Real claims rarely have only one clause. Here are two common combined examples so you see the scale of money involved.
Scenario A — Sub-limit + Co-pay
Calculation:
1. Insurer’s sub-limit pays ₹40,000.
2. The remaining ₹80,000 must be paid by you.
3. Co-pay does not rescue the remainder (co-pay applies to the approved part;
remainder over sub-limit is out-of-pocket).
Result: insurer pays ₹40,000; you pay ₹80,000 (plus any co-pay on the
₹40,000 if co-pay applies before sub-limit — check exact wording).
Step 1: Approved after PD = ₹3,00,000 × 0.333333 = ₹1,00,000 (we round carefully)
Step 2: Apply deductible ₹25,000 → balance = ₹75,000
Step 3: Apply co-pay 10% of ₹75,000 = ₹7,500 (you pay)
Insurer pays = ₹75,000 − ₹7,500 = ₹67,500
Total you pay = PD portion (₹3,00,000 − ₹1,00,000 = ₹2,00,000) + deductible ₹25,000
+ co-pay ₹7,500 = ₹2,32,500
1. Non-medical expenses / consumables cap — some policies cap
reimbursement for items such as gloves, masks, catheters. If a policy caps
“non-medical items” at ₹2,500 per claim, those charges beyond this are
out-of-pocket.
2. Room rent as % of sum insured — common formulation (e.g., 1% of SI/day).
Know the percent and compute the rupee amount.
3. Annual aggregate deductible — family floaters may have aggregate
deductible (pay once per year for the family).
4. Per event deductible — deductible per claim/event rather than per year.
5. Coinsurance — in some markets coinsurance = co-pay (India mostly uses
co-pay terminology).
6. Back-to-back deductible / fronting — rare and corporate level (not common
for retail buyers), where deductible equals full coverage — effectively
self-insured. Know the term.
Because:
Search (CTRL+F) these phrases inside the policy PDF before you buy:
(practical steps)
Buy no sub-limit / no room rent capping policies if you can afford the small premium difference. Many modern “zero pocket pay” policies advertise this clearly.
Avoid co-pay for older family members unless unavoidable — the percentage hurts on big bills.
Use network hospitals — cashless approvals and negotiated package rates reduce surprises.
Prefer in-house claim settlement insurers where possible — they often have faster approvals. (TPA vs in-house differences affect claim speed.)
Choose an appropriate sum insured — higher SI reduces likelihood of sub-limit pressure and offers breathing room.
Consider a top-up + base policy strategy — base covers day-to-day and top-up protects large claims.
Be accurate and thorough in proposal form — non-disclosure is a common reason for rejection.
Annual policy review — medical inflation and family changes mean your needs change; review annually.
It depends on your age and likely treatments. For an elderly person, co-pay + room-rent capping kills most claims. For younger people, voluntary deductible can be fine to lower premiums.
Rarely in full detail. They show sum insured and premium, but not always every sub-limit or the exact proportionate deduction wording. That’s why a human check matters.
Not usually; these are product features. You can choose a different product or buy a higher sum insured or add riders that remove sub-limits.
(Check these pages for policy wording examples and deeper reading)
1. Read the co-pay clause — percentage and when it applies.
2. Read deductible clause — voluntary/compulsory/aggregate; per-claim or
per-year.
3. Search for sub-limits — procedure-wise caps and non-medical item caps.
4. Search for room rent limit and the words “proportionate” or “proportionate
deduction”.
5. Confirm how TPA / in-house claims are handled in that product.
6. Compute a worst-case example (use numbers above as template).
7. If wording is ambiguous, ask the insurer to explain in writing before purchase.
8. Consider paying a slightly higher premium to remove co-pay/sub-limits where
feasible.
If you share a policy PDF (or the exact product name), We can highlight the exact paragraphs that contain co-pay, deductible and sub-limits and explain line-by-line what they mean for your situation. That’s the precise, personalised protection Winsure Health promises.