Aggregate Limit

In choosing an insurance policy, a client has to understand the aggregate limit offered by the policy to choose the right plan and to settle for the agreement on the term of filing a claim. It is a must that clients knew the essentials of an insurance policy.

What is an aggregate limit? An aggregate limit is the maximum amount an insurance company will offer to their clients to be paid or borrowed. This refers to either a specific time limit such as two years or a maximum lifetime. By the end of this time specified, the limit usually resets. Limits may apply to payments and loans such as on salary and students loans.

In the case of student loans where students loan to fund their education, an aggregate limit is the amount a student can borrow for their education. Once the student borrower took the full amount of the limit, she can no longer borrow additional amount from the company even if she hasn’t finished schooling yet.

In the insurance industry, aggregate limit is the maximum amount an insurance policy will pay out to the insured. A specific time will be noted may it be an annual limit or for a lifetime. Claims that exceed the aggregate limit will be held responsible by the policy holder to be shouldered. In addition, insurance holders will be allowed to have multiple claims in such period but then again the claims should not exceed the limit to be paid out.

For instance, if your insurance policy has an aggregate limit of $15 million US dollar and you made a claim of $13 million US dollars, the company will pay all your claims. However, if you exceeded the limit take for instance you made a claim of $17 million dollar, the company will only pay the aggregate limit of $15 million dollar and the remaining $2 million dollar will be shouldered by the insured. Aggregate limit is typically standard for most insurance policies including health insurance.

It is a must that insurance holders would be careful in selecting a good insurance policy. It is important to know the aggregate limit of such insurance company. The higher the aggregate the limit is, the better. However, if the aggregate limit is not too high to cover your needs, you can sort to choose companies which gives higher aggregate limit. Always bear in mind that one’s your claims are higher than the aggregate limit in your insurance policy, the exceeding amount will be shouldered solely by you.

Some expenses may be exempted from the limit. For instance, government officials who have limit on their annual salaries based on their position and also for government employees who will only receive additional payments if they work beyond the regular time of work such as in an overtime or severance pay.

Whatever the case may be, insurance holders must be clever enough to choose an insurance company with just aggregate limit to provide protection of bankruptcy in the side of the insured.