What Is the Difference Between Coinsurance and Co-Payment?

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Coinsurance and co-payments are very similar in that the insured is taking on a burden of the payment for the insurance company. Learn how coinsurance is often used as a broad term for all insurance types, while co-pay generally refers to medical insurance, with information from a licensed life and health insurance representative in this free video on insurance.

Part of the Video Series: Insurance Information
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Video Transcript

This is John Pinelli, financial representative, talking to you today about coinsurance and co-payment. The term coinsurance coincides with the fact that an individual will share some of the burden of insurance with the insurance company, so there, in essence, co-insuring by sharing a portion of that claim or a portion of that fee. Basically, participating in the insurance process through self insurance. This is very similar or almost synonymous with a co-pay, which is used when heading into the doctor, you may pay a co-pay for each visit. So, you will pay out of pocket part of what that insurance would cover. You're basically co-insuring or combining with the insurance company to pay that entire coverage. Co-pays can range from $25 to $50 to $100. And this is, again, the amount that you would pay upon visiting the doctor. Coinsurance is a much more broad term. It can apply to other areas of insurance as well. You may have an insurance policy on your automobile or on your life or on your house or something else that would provide partial coverage, but would not provide entire coverage. And the rest you may decide to self insure or cover yourself, thus the term coinsurance. So, this has been John Pinelli, financial representative, talking to you today about coinsurance and co-pay.

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