Maximum Limit

Published: | Updated: January 9, 2018

Definition - What does Maximum Limit mean?

A maximum limit, in the context of insurance, is the total amount of money that an insurance company will pay over a period of time to satisfy a policyholder's claims. Thereafter, it is the responsibility of the policyholder to cover the cost of services or treatments. A maximum limit usually applies to one policy year; however, this is not always the case.

It may also be known as maximum coverage, policy limit, or policy maximum.

Insuranceopedia explains Maximum Limit

There has been some debate about whether or not there should be maximum limits for essential benefits, such as a life-saving surgery or treatment of a deadly infection. As of 2014, health insurance companies are not allowed to put maximum limits on such benefits. However, maximum limits are still allowed for non-essential benefits. Therefore, those who have policies with maximum limits may have to pay out-of-pocket expenses for certain non-essential benefits once the insurer has paid out benefits equal to the maximum coverage.


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