Definition

The termination of your insurance if premiums are not paid on time. A lapse can leave you unprotected until you reinstate your policy.

What to consider

  • Know the maximum limits for each benefit.
  • Plan for additional expenses beyond the cap.
  • Review if caps are adjusted periodically.

Real world scenarios

  • A health plan sets a benefit cap on the maximum amount payable for a specific service, such as $1,000 per year for physical therapy.
  • An insurance policy includes a cap on out-of-pocket expenses for dental services.
  • A group plan limits benefits for certain elective procedures to a predetermined cap.

Related terms

Insurance & Financial Protection