Your Lifetime Max Benefits

Each insurance policy has a lifetime maximum (lifetime max). This is the maximum (and cumulative) amount of money your policy will pay in benefits. Once that limit has been reached you are no longer eligible for any benefits under that policy. You will have to purchase another insurance policy.

Typically, this limitation is between one and five million dollars. There are some employer policies that are as low as $10,000. It is important to be aware of this maximum. All claims paid by your insurance provider are applied to this limit.

Here’s an example:

You have had your insurance policy for five years, and have used it quite a bit over the years! Over the past five years, you have had a quadruple bypass surgery, your broken nose fixed, the fractured leg repaired after your skiing accident, your bunions removed and surgery for a ruptured appendix. The total amount your insurance policy has paid in claims is $750,000 out of your $1,000,000 policy (there is only $250,000 remaining in claims that can be billed).

You are riding your mountain bike along a trail when you hit some loose gravel and end up falling down a rocky cliff. You are taken to the hospital and are treated for internal injuries (a ruptured spleen), a broken jaw, and a broken arm. Unfortunately, you have to undergo surgery for the removal of your spleen and the repair of the fractured jaw and arm.

Due to all kinds of ugly complications, you are sent home a month later. Your hospital bill alone is $500,000. Because you only have $250,000 of your $1,000,000 lifetime maximum remaining, your insurance carrier can only pay $250,000 of the $500,000 hospital claim. All other medical expenses including the outstanding balance for your hospital stay will be 100% your responsibility.

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