Retention limit is the formal ceiling on the amount of insurance risk a company or reinsurer will keep on its own books for a given exposure before transferring the excess through reinsurance or other risk-sharing mechanisms. In life insurance, retention limits are usually expressed as a maximum net face amount per life or per policy, and may vary by age, product type, and underwriting class. Retention limits help balance the desire to write large cases with the need to protect capital and comply with risk-based capital standards and internal risk appetites.

Operationally, retention limit is programmed into underwriting and policy issuance systems so that any case exceeding the limit automatically triggers reinsurance cession or senior review. Advisors encounter retention limits when jumbo cases require multiple carriers or complex layering strategies. Reinsurance negotiations can raise or lower practical retention limits over time, influencing how much business a carrier can support per client. For agencies specializing in large estates or corporate coverage, understanding each carrier's retention limit helps with carrier selection, case design, and managing production expectations for high-net-worth clients.