What is Co-insurance?

What is Co-insurance?

Co-insurance

Co-insurance term is usually referred to health insurance companies.  In this type of policy, you share the coverage with, the insurance company in the percentage of the policy value, after paying deductible or co-payment.  It is the split of insurance coverage between you and insurance company; usually, the split would be 80/20 % where you are liable to pay 20% and the remaining amount by the insurance company.  

For example, for health policy you have claimed for $200, according to policy clause you have to pay the deductible, let say $100, now after paying the deductible the remaining amount is $100, now you have a co-insurance which is split into 80/20%. So you will pay $20 out of $100 from your pocket while the $80 will be paid by co-insurance(meaning the insurance company).

Definition By Investopedia.com

Coinsurance is the amount, generally expressed as a fixed percentage, an insured must pay against a claim after the deductible is satisfied. In health insurance, a coinsurance provision is similar to aco-payment provision, except co-pays require the insured to pay a set dollar amount at the time of the service.