Franchise and co-insurance are terms used in insurance policies, including medical insurance. A franchise is the amount of money you must pay out of pocket before your insurance coverage kicks in. For example, if your policy has a $500 franchise, you would need to pay the first $500 of any medical expenses before your insurance starts covering costs. Co-insurance is the percentage of costs that you are responsible for after you've paid your franchise. For instance, if your policy has a 20% co-insurance, you would pay 20% of the costs after you've paid the franchise, and your insurance would cover the remaining 80%.