A catastrophic limit is a cap, set by your insurance policy, on the amount of out-of-pocket expenses you’ll pay. There are several options regarding this limit and it’s important that you understand what qualifies - and what doesn’t.

The cap may be limited to a specific event or illness. For example, if your insurance policy has a $50,000 cap and you’re share (for whatever reason) on a heart procedure is to be $55,000, the catastrophic limit means that you’ll only pay the $50,000 and your insurance will pick up 100 percent of the cost after that. However, if you then have a stomach surgery, the catastrophic illness clause may require that you again meet that limit before the insurance begins picking up the entire tab for that incident. It’s unlikely that anyone would face two such devastating illnesses, but it’s something to consider when you’re choosing your insurance police.

The cap may also refer to an individual or an entire family. In that case, you may know that your insurance is going to begin picking up 100 percent of the cost of health care after you’ve paid out $50,000 on your entire family. Depending on deductibles, co-payments and other factors, this could be an important option as you’re considering a health insurance plan. Ask your broker for details before you sign on the dotted line.