Coinsurance Meaning: Definition, Examples, and Translations
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coinsurance
[ˈkɔɪnˌʃʊərəns ]
Definition
insurance agreement
Coinsurance is a type of insurance arrangement where the insured party and the insurer share the costs of a covered loss in a specified proportion. This means that after the deductible is met, the insured only pays a certain percentage of the remaining costs, while the insurer pays the other percentage. Coinsurance is common in health insurance plans, property insurance, and other types of coverage. It can affect both the premium amount and the out-of-pocket expenses for the insured individual or entity.
Synonyms
co-payment, cost-sharing, shared responsibility.
Examples of usage
- The health insurance plan has a 20% coinsurance after the deductible.
- She never realized she would have to pay coinsurance until she received the medical bill.
- When purchasing business property insurance, they opted for a higher coinsurance rate.
Translations
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Origin of 'coinsurance'
The term 'coinsurance' combines 'co-', a prefix meaning 'together' or 'jointly', with 'insurance', which originates from the Latin word 'sicurare', meaning 'to make safe'. The concept emerged in the insurance industry during the late 20th century as insurers sought ways to share risks with policyholders. It allowed both parties to distribute financial responsibilities, especially in health and property insurance. The intent was to encourage responsible behavior among insured parties, as having a stake in costs could lead to more prudent decision-making regarding healthcare or property management. Over time, coinsurance has become a standard practice in various types of insurance products, illustrating a shift toward cost-sharing models in the financial and healthcare sectors.