See: contractual allowance.
Insurance Encyclopedia
Purchase order
Type of payment between two federal agencies.
Purchased diagnostic test
Test purchased from an outside supplier on behalf of the patient such as an electrocardiograph, x-ray, or ultrasound. The physician does not personally perform or supervise the test.
Purchased life annuity
An annuity purchased under a contract approved by the IR or by an individual out of his own capital. They are taxed as investments the capital content is tax-free and the interest content is treated as unearned income. Exempted from these provisions are all annuities secured under approved pension schemes of any nature, including retirement annuities under the current legislation (ICTA88). These are taxed as earned income on the total of each instalment.
Purchaser
1. Member of a managed care plan who pays the monthly insurance premium. 2. Managed care organization or insurance company that reimburses providers for the medical services that they provide (“purchase”) for their members.
Purchaser’s interest clause
Fire insurance clause to protect the interest of the purchaser of property if, at the time of loss, the insured property is the subject of an uncompleted contract of sale. The policy covers the interests of the purchaser and vendor up to the completion. The clause refers to buildings only and only to the extent that the property is not otherwise insured by the purchaser.
Purchasing group
An entity that offers insurance to groups of similar businesses with similar exposures to risk.
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US: Authorized by the Liability Risk Retention Act of 1986, a group formed to obtain liability coverage for its members, all of which must have similar or related exposures. The Act requires a purchasing group to be domiciled in a specific state. In contrast to risk retention groups (RRGs), purchasing groups are not risk-bearing entities.
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MEDICAL,USA,REFERENCE: See: alliance and consumer health alliances.
Pure captive
A captive insurance company that confines its underwriting to the risks of its parent company.
Pure endowment
Life insurance policy in which the face value is paid only if the insured survives to the end of the stated endowment period; those who do not survive the endowment period receive nothing. Very few of these policies are sold.
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UK: Life policy that pays the sum insured if the life insured survives the policy term but nothing in the event of earlier death.
Pure endowment (Life Insurance)
An endowment that is only paid if the designated payee is still living at the end of the predetermined endowment period.