What is an aggregate factor in Stop Loss?

An aggregate factor in Stop Loss insurance refers to the maximum amount an insurer is liable to pay for all claims within a specified period, typically a policy year. It serves to limit the total reimbursement the insurer provides to the policyholder for claims exceeding the predetermined retention level. This mechanism protects insurers from catastrophic losses while providing businesses with a safety net for high-cost claims. Essentially, it helps manage risk and predict financial exposure for both parties involved.