Unallocated Benefit

What Does Unallocated Benefit Mean?

An unallocated benefit is a benefit not specifically listed on a health insurance policy, but which the policy may cover up to a certain amount. Unallocated benefits typically refer to coverage for miscellaneous costs incurred during a hospital stay. These costs are grouped under the term “unallocated benefits” to avoid the need to list each one individually on the policy.

Insuranceopedia Explains Unallocated Benefit

When a health insurance policyholder is hospitalized, numerous expenses can accumulate, such as the cost of an IV, medications, or lab tests. These are examples of items often covered under unallocated benefits.

Grouping these various costs together saves the insurance company significant time and resources, as it eliminates the need to assess each expense individually. Instead, the insurer reimburses the policyholder for a predetermined amount of the total cost of these miscellaneous expenses.