Benefit Ceiling

The Benefit Ceiling is the maximum amount that a medical insurance policy will pay. Most financial planners suggest that you purchase medical insurance policies with a benefit limit of at least $1,000,000. Beware of policies that advertise a high benefit ceiling but have a much lower benefit limit per claim, or a lower maximum benefit per year.

Some policies have benefit ceilings for a specific illness. Our consultants warn of several policies that are currently being tele-marketed in which the insurer promises a benefit ceiling of $2,000,000. Unfortunately, the fine print says that the most that the company will pay for a specific disease or illness is $500,000. This is inadequate coverage. To get to their $2,000,000 benefit ceiling in this example, you would have to have four separate and unrelated illnesses totaling $500,000 each. This is a virtual impossibility. It would be to your advantage to avoid this type of coverage.