Stop-loss insurance
Stop‑loss insurance helps protect insurers and self‑insured employers from very large health claims. It only starts paying after claims pass certain thresholds.
- Specific (individual) stop‑loss: Each person has a deductible, for example 300,000. If one person’s claims exceed that amount, the insurer pays the rest of that claim.
- Aggregate stop‑loss: Looks at all claims for the policy year. If total claims exceed the annual aggregate limit, the insurer pays the difference, up to the limit.
Who buys it: Insurance companies and self‑insured employers buy stop‑loss coverage to limit big costs. The company is the insured, and the employees covered by the plan are the participants.
Premiums: The cost is usually given per employee per month (PEPM) or per employee per year (PEPY). Rates are based on the number of participants, their ages, and other factors.
Annual limits: Stop‑loss plans typically have an annual limit for each participant and an overall limit for the policy year.
Why it’s used: Self‑insured plans fund most claims themselves, so stop‑loss coverage protects against catastrophic costs.
Other notes: There are special stop‑loss products, such as Personal Stop Loss (PSL) offered at some providers like Lloyd’s of London. PSL can reduce unlimited liability but isn’t always available and may involve mutual arrangements.
This page was last edited on 3 February 2026, at 06:01 (CET).