Health insurance glossary
Annual maximum and lifetime maximum
Plain-English definition
An annual maximum is the most a plan pays for a benefit, or for all benefits, in one benefit year. A lifetime maximum is the most it pays over the whole time you are covered. Once a maximum is reached, you pay the rest yourself. Health, dental and drug plans commonly use both, often with different maximums for different services.
By the HealthRate editorial desk
How it works
Maximums can apply to one service, such as physiotherapy, to a category, such as basic dental, or to the whole plan.
Annual maximums reset at the start of each benefit year; lifetime maximums do not reset.
Coinsurance and deductibles apply before the maximum is counted, so the plan's share, not the full bill, is what uses up the maximum.
Why it matters
For a long course of treatment or an expensive drug, the maximum decides when coverage stops. Comparing maximums matters as much as comparing the list of what is covered.
Not to be confused with
Not the deductible. The deductible is what you pay before the plan starts paying; the maximum is where the plan stops.