What does "lifetime maximum" mean?
Lifetime maximum is one of the most important features of a medical insurance policy. Most companies in California for example are 5 million or 6 million dollars, and some companies are even unlimited. In other states, the lifetime maximum may only be a million. Now what a lifetime maximum really means is how much the insurance company is on the hook for if you have a catastrophe. So as an example, one of my clients many years ago was in a car accident and she was severely burned. She had at least 2 plastic surgeries to repair herself so that she looked beautiful again. The insurance company paid probably 2 million dollars out of pocket for her. They paid all of that expense. Now she still has, under her health insurance policy, a 6 million dollar lifetime maximum so that she has used up 2 million, she still has 4 million left. Policies that are issued in some states are only a million. Some of the colleges that have college policies, for example, like my own son is going to a college where they wanted me to purchase the health insurance policy that is offered for the school kids, and it only had a 3, dollar lifetime maximum. The problem with that is that if his expenses were greater than 3, dollars, I would be on the hook for the balance.
