Deductible vs co-payment vs sub-limit: what's the difference?
Written for policyholders in India · Last reviewed 2026-10-10
All three make you bear part of a claim, in different ways. A deductible is a fixed amount taken off first, a co-payment is a share of the admissible claim that you pay, set as a percentage or an amount, and a sub-limit is a cap on what is paid for one item or treatment. A policy can use more than one of them, and each must be stated in your policy — so knowing which is which tells you what to check on a settlement sheet.
IRDAI's guidance on the Customer Information Sheet describes a deductible as a specified amount up to which the insurer will not pay, deducted from a larger claim. One insurer's wording defines a co-payment as a specified percentage of the admissible claim that you bear, and a sub-limit as a pre-defined limit beyond which the insurer will not pay. IRDAI's CIS format allows a co-payment to be a specified amount or a percentage.[1, 2, 3]
Side by side
| Feature | Deductible | Co-payment | Sub-limit |
|---|---|---|---|
| What it is | A fixed amount you bear | A share of the admissible claim you bear — an amount or a percentage | A cap on one expense or treatment |
| When it applies | Per claim, per year or both, as the policy says | On each admissible claim, or in the situations the policy names | Only when that item costs more than the cap |
| Effect on a small claim | A claim below it is not paid | You still pay your share | None, if the item is under the cap |
| Effect on a large claim | Fixed, so it matters less | Grows with the claim, if it is a percentage | Can leave a large unpaid gap on that item |
| Where to find it | Schedule, CIS and the deductible clause | Co-payment clause and the CIS row on financial limits | Benefits section and the CIS row on financial limits |
One illustrative claim, three ways
Take an admissible hospital claim of ₹2,00,000 that includes ₹60,000 for a cataract operation, under a policy with a ₹25,000 deductible per claim, a 10% co-payment and a cataract sub-limit of ₹30,000. Suppose, for simplicity, that the policy applies the sub-limit first, then the deductible, then the co-pay — your policy's own order may differ.[1, 2]
| Step | Effect | Running total |
|---|---|---|
| Admissible claim | 2,00,000 | |
| Cataract sub-limit: 60,000 billed, cap 30,000 | −30,000 | 1,70,000 |
| Deductible per claim | −25,000 | 1,45,000 |
| Co-payment of 10% | −14,500 | 1,30,500 |
| Insurer pays | 1,30,500 |
Change the order and the answer changes: in this example, a 10% co-pay taken before the deductible would come to ₹17,000 instead of ₹14,500. That is why the order of deductions on your settlement sheet is worth checking against the wording.[2]
What to check on a settlement sheet
- Each deduction should name its clause. A health insurer that disallows part of a claim must give full details with reference to the specific policy terms.[1]
- Each limit must be in your policy: a health policy must state its sub-limits, co-pay limits and deductibles.[3]
- Look for a fourth deduction tied to room rent — how proportionate deduction works.
- If you hold two indemnity health policies, the insurer you claim from first coordinates with the other to settle the balance — see claiming from two health policies.[1]
Sources
The official documents this page relies on. Rules change: where it matters to your claim, check the current version at the source.
1. IRDAI (verbatim copy hosted by the Institute of Actuaries of India)
Master Circular on Health Insurance Business, Ref IRDAI/HLT/CIR/PRO/84/5/2024 dated 29.05.2024 (17 pages, Version 1)Dated 2024-05-29 · Accessed 2026-10-09 · Cited at: IRDAI Master Circular on Health Insurance Business, IRDAI/HLT/CIR/PRO/84/5/2024, 29 May 2024, Chapter I, para 4(b)(vi) (CIS contents); IRDAI Master Circular on Health Insurance Business, IRDAI/HLT/CIR/PRO/84/5/2024, 29 May 2024, Chapter I, para 17(b); IRDAI Master Circular on Health Insurance Business, IRDAI/HLT/CIR/PRO/84/5/2024, 29 May 2024, Chapter I, para 18(a)
Read from a copy hosted at actuariesindia.org · Official page
2. The New India Assurance Co. Ltd.
Arogya Sanjeevani Policy - Policy Clauses (UIN NIAHLIP25044V022425)Accessed 2026-10-09 · Cited at: New India Assurance, Arogya Sanjeevani Policy wording (UIN NIAHLIP25044V022425), definition 3.13; New India Assurance, Arogya Sanjeevani Policy wording (UIN NIAHLIP25044V022425), definition 3.52
3. IRDAI (scanned verbatim copy hosted by TaxGuru)
Master Circular on Protection of Policyholders' Interests, 2024, Ref IRDAI/PP&GR/CIR/MISC/117/9/2024 dated 5 September 2024Dated 2024-09-05 · Accessed 2026-10-09 · Cited at: IRDAI Master Circular on Protection of Policyholders' Interests, IRDAI/PP&GR/CIR/MISC/117/9/2024, 5 Sep 2024, Schedule D, CIS – Health, row 8(ii) 'Financial limits of coverage' (pp. 101-102 of the copy read; table cell text joined); IRDAI Master Circular on Protection of Policyholders' Interests, IRDAI/PP&GR/CIR/MISC/117/9/2024, 5 Sep 2024, Schedule D, CIS – Health, row 8(iii) 'Financial limits of coverage' (p. 102 of the copy read); IRDAI Master Circular on Protection of Policyholders' Interests, IRDAI/PP&GR/CIR/MISC/117/9/2024, 5 Sep 2024, Schedule C, para 3.1(x)-(xiii) (p. 97 of the copy read); IRDAI Master Circular on Protection of Policyholders' Interests, IRDAI/PP&GR/CIR/MISC/117/9/2024, 5 Sep 2024, Schedule C, para 3.1(ix) ('Matters to be Stated in a Health Insurance Policy')
Read from a copy hosted at taxguru.in · Official page
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Read next
- What is a deductible in health and motor insurance?The fixed amount you bear before your insurer pays: how a deductible works per claim or per year in health cover, how motor deductibles apply, what to check.
- What is co-payment (co-pay) in health insurance?Co-payment is the share of an admissible health claim you pay yourself. How it is worked out, where co-pay conditions hide, and how to check it on a settlement.
- What is a sub-limit in health insurance?A sub-limit caps what your health insurer pays for one item or treatment. Common kinds, how room-rent limits can cut the whole bill, and how to check one.
- How to read the claim settlement letter and deduction sheet line by lineRead a claim settlement letter and deduction sheet line by line: the totals, each deduction and its clause, the order of the sums, and a check sheet to copy.
- Room rent limit and proportionate deduction: how one choice reduces the whole billHow a room-rent limit can cut the rest of a hospital bill in proportion, which charges a policy may exempt, a worked example, and how to check your own clause.
- Health insurance claim partially settled — why was less paid?Why a health claim is paid short in India: co-pay, sub-limits, room-rent cuts, non-payable items and other deductions, and how to check each one.