The allocation and division of a life insurer’s divisible surplus to shareholders and eligible policyholders (i.e. those holding with profits policies).
Insurance Encyclopedia
Allocation option
Allows a pension scheme member to opt for a lower pension in return for a lifetime pension benefit for the member’s wife, husband or dependants, if surviving at time of member’s death. The member can exercise this option at the time the pension is taken. See OVERLAP.
Allocation rate
The percentage of an investment in a financial product that is actually invested (e.g. 80 per cent) after initial charges have been taken into account.
Allopathy
Medical therapy in which a disease or abnormal condition is treated by creating an environment that is opposite to or incompatible with the disease or condition that the patient suffers. An example would be the use of antibiotic drugs given to patients to fight a disease caused by bacteria to which the drugs are antagonistic. Allopathic physicians are Doctors of Medicine (MDs).
Allotment of bonus
The apportionment or division of a life office’s surplus amongst its policyholders.
Allowable charge
1. In the Medicare program, the fee schedule amount for a medical service that is published annually by the Centers for Medicare and Medicaid Services (CMS). This fee is based on relative value units (RVUs) taking into consideration the physician’s work RVU, the practice expense RVU, and the malpractice insurance RVU. To bring the fees in line for the region where the physician practices and to adjust for regional overhead and malpractice costs, each of the RVUs is adjusted for each Medicare local carrier by geographic practice cost indices (GPCIs), pronounced “gypsies.” Sometimes this is called the approved charge. 2. Amount on which TRICARE figures the patient’s cost-share for covered care. This is based on 75% to 80% of the allowable charge.
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The lesser of the actual charge, the customary charge and the prevailing charge.
Allowable Costs
Charges which qualify as covered expenses under Health Insurance.
Allowable expense
Insurance policy provision under coordination of benefits that defines any medically necessary, reasonable, or customary item of expense and is a benefit of one or more of the insurance plans under which an individual is insured.
Allowable maximum
See: Earnings Cap. Alternative accommodation clause (loss of rent). A clause in both household buildings and contents insurances to cover the insured if his home becomes uninhabitable due to insured damage. The buildings insurer will pay the reasonable cost of: any necessary alternative accommodation, loss of rent due to the insured and a maximum of two years ground rent for which the insured is liable, subject to a maximum of 10 per cent of the amount insured. The contents insurer covers the cost of alternative accommodation and rent payable by the insured up to 20 per cent of the sum insured.
Allowed amount
Maximum dollar value the insurance company assigns to each procedure or service on which payment is based. Typically, a percent (e.g., 80%) of the allowed amount is paid by the insurance carrier. Also called approved charge or approved amount. See also maximum allowable and maximum allowable charge (MAC).