WWW.TOP4SURE.

IN IC 27 – HEALTH INSURANCE

About TOP4SURE.in
Welcome to TOP4SURE!

We, at TOP4SURE, offer you online KNOWLEDGE BANKS for various INSURANCE exams. Our KNOWLEDGE BANKS
not only provide important questions but also the correct answers along with its brief explanation which helps
you to understand the topic very well.

We understand that in order to be successful in today’s competitive world, one needs to keep updating self-
knowledge time to time. But for many, it becomes a crucial task while handling other responsibilities. Therefore,
at TOP4SURE, we have designed our KNOWLEDGE BANKS in such a way that you can achieve your goals
successfully along with your regular responsibilities.

The basic idea behind these KNOWLEDGE BANKS is “More knowledge in Less Time”.

We have well experienced team of professionals working on these KNOWLEDGE BANKS. The mock tests questions
designed by them have the highest probability of being asked in the exams. Therefore, with these highly valued
KNOWLEDGE BANKS, the success rate at TOP4SURE is almost 100%.

At TOP4SURE, we believe more in quality than in quantity. Therefore, we select the most important 300-400
practice questions and answers instead of offering you thousands of questions. We keep on updating our exams
time to time in order to keep our students up to date with the current exam trends.

With TOP4SURE KNOWLEDGE BANKS, you will surely pass your exams with flying colours.

WE WISH YOU ALL THE BEST!

ATTENTION

The student rights to view this downloaded KNOWLEDGE BANK will automatically expire
after 90 days from the date of purchase.

All Rights Reserved. No Part of this documents may be reproduced, stored in a retrieval system, or transmitted, in
any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior
written permission from TOP4SURE.in. For any clarification regarding this document or if you feel there are errors
in the KNOWLEDGE BANK, please write us at info@top4sure.in.
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

PRACTICE TEST - 4

Question1 As per the IRDA definition, the maximum waiting period for covering pre-existing illness/
disease is 48 months. Which of the following is correct in this regard?
(a) The waiting period can be reduced
(b) The waiting period can be increased
(c) Insurers are free to decide any waiting period
(d) The waiting period cannot be changed
(e) None of the above

Correct Answer The waiting period can be reduced

Answer Explanation As per the IRDA definition, the maximum waiting period for covering pre-existing diseases
is 48 months. Insurers are free to reduce the waiting period from 4 yrs. to a lesser period,
but they cannot increase this period.

Question2 Under health insurance, there are various types of risks being faced by an insurer. Which is
risk associated with liquidity risk?
(a) Underwriting practices and risk appetite is the core for this type of risk
(b) Liquidity risks depends on the mix of investment options chosen by the insurer
(c) Liquidity risks depends on the overall environment in the economy
(d) Even if the insurer is profitable, there can still be a mismatch between the cash flows and
current assets and liabilities
(e) Even if the insurer holds good quality assets, holding long term debt can lead to liquidity
risk

Correct Answer Even if the insurer is profitable, there can still be a mismatch between the cash flows and
current assets and liabilities
Answer Explanation Even if the insurer is profitable, there can still be a mismatch between the cash flows and
current assets and liabilities & it reduces the insurer’s liability to arrange adequate cash to
pay its liabilities at a short notice.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question3 CABG under critical illness refers to:

(a) Coronary Artery Bypass Grafting
(b) Corona Alternative Bypass Grafting
(c) Corporate Alter Bypass Governance
(d) Bypass of Coronary Alternative Graft
(e) Cataract Alternate Bypass Governance

Correct Answer Coronary Artery Bypass Grafting

Answer Explanation Coronary artery bypass grafting (CABG) is a type of surgery that improves blood flow to the
heart. It's used for people who have severe coronary heart disease (CHD), also called
coronary artery disease.

Question4 Morbidity is the likelihood or risk of a person getting ill or sick thereby requiring treatment
or hospitalization. Which of the following do not influence morbidity?
(a) Diabetes
(b) Age of senior citizens
(c) Over weight
(d) Past or present history of ailment
(e) All Occupations

Correct Answer All Occupations

Answer Explanation Not all occupations increase the risk of morbidity. White collared individuals are less risky
compared to the person engaged in the hazardous activities. Other factors like ‘Diabetes,
age of senior citizens, being overweight or past or present history of ailment’ does
increases the morbidity risk.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question5 What is RAG (Red, Amber, and Green) under technology and process interface?
(a) Fraud investigations by RAG agencies
(b) Propensity modeling
(c) Ease of data capture
(d) Is a robust whistle blower policy
(e) Hospitals, agents, diagnostic centers etc. are rated red, amber or green based in terms of
claim

Correct Answer Hospitals, agents, diagnostic centers etc. are rated red, amber or green based in terms of
claim
Answer Explanation Under this process, all the business providers are analysed periodically & the worst
performers among hospitals, agents, diagnostic centers etc. are rated red, amber or green
(based in terms of claim) respectively through analysis & segment classification
mechanisms.

Question6 Apart from technical analysis, which of the following is NOT a consideration in pricing a
health insurance product?
(a) Claims guarantee
(b) Premium guarantee
(c) Comparison with similar product of the competitors
(d) Comparison with other product of the same company
(e) Cross subsidy

Correct Answer Claims guarantee

Answer Explanation Claims can never be guaranteed and therefore cannot be a factor in pricing a product. Rest
of the factors i.e. Premium guarantee, Comparison with similar product of the competitors,
Comparison with other product of the same company and Cross subsidy needs to be
analysed during pricing.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question7 Data is one of the vital elements of health insurance business. It is used in designing &
pricing of the health insurance product. Data is extensively used by the policy makers like -
1. IRDAI
2. Ministry of Health and Family Welfare
3. Home Ministry

(a) Only 1 and 2 are correct

(b) Only 1 is correct
(c) Only 3 is correct
(d) Only 1 and 3 are correct
(e) Only 2 is correct

Correct Answer Only 1 and 2 are correct

Answer Explanation Data which is one of the vital elements of health insurance business is used in designing &
pricing of the health insurance product. Data is extensively used by the policy makers like
IRDAI and Ministry of Health and Family Welfare. Home Ministry has nothing to do with
health insurance data.

Question8 How much drugs are under the price control regime?
(a) Almost all
(b) About 25%
(c) No drug is under the price control regime
(d) About 50%
(e) A very small number

Correct Answer A very small number

Answer Explanation A very small number of drugs are under price control. Rest is under the watch of price
regulator but falls under free-pricing regime.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question9 What is the approx. percentage of population covered under commercial health insurance
in India?
(a) 5%
(b) 25%
(c) 10%
(d) 2%
(e) No data is available

Correct Answer 5%
Answer Explanation India has huge potential for commercial health insurance since only about 5% of the Indian
population is currently has an access to it.

Question10 Analyse the options and mark the measure(s) under human interface / process
improvisation where fraud is not manageable?
(a) Stop doing business in that format
(b) Welcome call
(c) Fraud investigations by outside agencies
(d) Comprehensive claims information
(e) Ability to detect fraud effectively

Correct Answer Stop doing business in that format

Answer Explanation If the fraud is not manageable despite all processes or control measures, then the only
alternative is to stop doing business in that format.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question11 Which of the following statement is correct under a CI policy?

1. The prohibitive cost of CI treatment renders ordinary hospitalization policy inadequate
2. CI policies are available both under indemnity as-well-as on benefit basis
3. There are stand-alone or CI rider policies available under life insurance policies also
(a) Only statement 1 is correct 2 & 3 are incorrect
(b) Statement 2 & 3 are correct but statement 1 is incorrect
(c) None of the statements are correct
(d) Only statement 2 is correct
(e) All of the above statements are correct

Correct Answer All of the above statements are correct

Answer Explanation The critical illness policy is primarily meant for taking care of all of the above factors which
the ordinary hospitalization policy may not offer.

Question12 When the cashless option under the health insurance started operating in India?
(a) 1986
(b) 2001
(c) 2010
(d) 2004
(e) 2009

Correct Answer 2001

Answer Explanation Until 1986, Mediclaim was a generic name for the health insurance in India. It was a health
insurance product offered by PSU Co.’s which was offering reimbursement on indemnity
basis. Later with the opening of the insurance sector for the private players in 2001,
innovation of product & cashless option started operating in the Indian market.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question13 Who analyses and requires health insurance data to evaluate company’s liabilities for
financial reporting & maintaining the required solvency margins?
(a) TPA’s
(b) Management
(c) Government
(d) Actuaries
(e) Finance

Correct Answer Finance

Answer Explanation Finance department requires health insurance data to evaluate company’s liabilities for
financial reporting & maintaining the solvency margins as stipulated by the regulators.

Question14 What kind of benefits does a Personal Accident policy offers to an insured? 1. It provides
weekly benefits 2. It provides lump sum benefits 3. It provides expenses for day care
treatment
(a) Only statement 1 is correct
(b) Only statement 2 is correct
(c) Only statement 3 is correct
(d) Only statement 1 & 3 are correct & statement 2 is incorrect
(e) Only statement 1 & 2 are correct & statement 3 is incorrect

Correct Answer Only statement 1 & 2 are correct & statement 3 is incorrect
Answer Explanation PA policy provides weekly benefits for temporary disablement and lump sum benefit in the
event of death or permanent disablement. It doesn’t provide expenses for day care
treatment.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question15 Which of the following is not an exclusion under the health insurance policy?
(a) Any disease contracted during the waiting period
(b) Dental treatment of any kind unless requiring hospitalization
(c) Voluntary medical termination of pregnancy during 1st 12 weeks of conception
(d) Expenses on vitamin & tonics forming the part of treatment
(e) Cost of spectacles & contact lenses

Correct Answer Expenses on vitamin & tonics forming the part of treatment
Answer Explanation Expenses on vitamin & tonics forming the part of treatment is covered under the policy but
the rest of the options are excluded.

Question16 What is the difference between indemnity policy & benefit policy under general insurance?
1. There is no benefit policy in general insurance
2. No difference both pays the actual loss suffered
3. Under benefit policy, the insurers pay the flat amount stated in the policy irrespective of
the amount spent by the insured
(a) Only statement 1 is correct
(b) Both 1 and 2 statements
(c) Only statement 2 is correct
(d) Only statement 3 is correct
(e) Both statements 2 & 3 are correct

Correct Answer Only statement 3 is correct

Answer Explanation The indemnity policy reimburses only the actual amount spent whereas the benefit policy
pays a flat amount as per contract, irrespective of the cost incurred.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question17 Indian population is mostly dependent upon the private health care system. Public
expenditure on health in India as per NHA Cell, 2009 is to the tune of:
(a) Around 26% by private healthcare and 72% public expenditure
(b) Around 72% by private healthcare and 26% public expenditure
(c) Around 26% by private & public healthcare and 72% by other sources
(d) Around 72% by private & public healthcare and 26% by other sources
(e) 50-50% contribution from both private and public expenditures

Correct Answer Around 72% by private healthcare and 26% public expenditure
Answer Explanation The share of public or Government spending is about 1/5th of the total health expenditure
in India. It is done by the Central, State or the Local Government taken together. The Indian
population is therefore largely dependent upon privatized healthcare system in India
against about 90% in Japan.

Question18 Portfolio level claims are typically reinsured where the severity & frequency is .
(a) Low frequency and high frequency
(b) Low frequency and low severity
(c) High severity and high frequency
(d) High severity and low frequency
(e) Low severity and high frequency

Correct Answer Low severity and high frequency

Answer Explanation Claim frequency and severity grid determines the reinsurance requirements. The
reinsurance requirement arises generally when there is an element of ‘Low severity and
High frequency’. The claims with low frequency and low severity are not reinsured and the
claim where the frequency is high severity is low, the business is reinsured at the portfolio
level.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question19 The pharmaceutical sector is under the control of:

(a) Ministry of Chemicals
(b) Ministry of Pharmacy
(c) The drug controller
(d) Ministry of Finance
(e) None of the above

Correct Answer Ministry of Chemicals

Answer Explanation The pharmaceutical sector is under the control of Ministry of Chemicals.

Question20 Analyze the following statements with respect to the best practice survey on grievance
redressal and mark the correct option & advice which one is INCORRECT 1. It was
undertaken by the CII Communication and awareness working group 2. The best practice
questionnaire was sent to all the General Insurance and Standalone Health insurance
companies of which 100% responded positively 3. These best practices have been
circulated amongst the insurance companies for their reference and for rating in terms of
importance
(a) Only Statement 1 is incorrect
(b) Only Statement 2 is incorrect
(c) Only Statement 3 is incorrect
(d) Only Statement 1 & 3 are incorrect
(e) Only Statement 2 & 3 are incorrect

Correct Answer Only Statement 2 is incorrect

Answer Explanation The best practice survey on grievance redressal was undertaken by the CII Communication
and awareness working group & the questionnaire was sent to all the General Insurance
and standalone Health insurance companies of which only 40% had responded.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question21 Which of the following is NOT a problem faced by Indian Public Health care system ?
(a) There is a lack of funding
(b) Indian labour is poorly motivated
(c) There are issues of access
(d) More Government initiatives towards PHCS
(e) Skewed geographical distribution

Correct Answer More Government initiatives towards PHCS

Answer Explanation More Government initiatives towards PHCS aren’t a problem faced by Indian Public Health
care system. Indian Public Health care system has enough initiative provided by the Govt.
towards PHCS (Public Health Care System).

Question22 Which insurance scheme will provide Shantanu health care coverage? Please note he is a
retired civil servant in India.
(a) Self-financed schemes only
(b) ESIS
(c) CGHS
(d) Both 2 and 3
(e) Both 1 and 3

Correct Answer Self-financed schemes only

Answer Explanation Self-financed schemes are the only option for Shantanu who is a retired civil servant in
India. ESIS & CGHS are meant for blue collar workers & Central Govt. employees only.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question23 When the re-insurance market is soft, it will not always be possible to price a non-
proportional reinsurance in a way which allows for .
(a) Marketing costs
(b) Underwriting profit
(c) Administration costs
(d) Reinsurance taxation
(e) Investment income

Correct Answer Underwriting profit

Answer Explanation

Question24 How much does the private health expenditure account for of all the health spending in
India ?
(a) Around 25%
(b) Around 50%
(c) Around 75%
(d) Around 60%
(e) Around 10%

Correct Answer Around 75%

Answer Explanation Private health expenditure accounts for around 72% of all health spending in India. The
ratio of private vs. public expenditure is around 72% vs. 26%.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question25 What is most important in a contract which helps in deciding the premium in an insurance
market?
(a) Payment capacity of the insured
(b) Capacity of contract
(c) Offer and acceptance
(d) Legality of form
(e) Consideration

Correct Answer Consideration

Answer Explanation The extent of premium to be paid by the proposer is determined by the input & declaration
provided by the customer about their age, health status etc.

Question26 In which type of policy there is coverage even in case of non-hospitalization?

(a) Top up plans
(b) Personal accident cover
(c) Disease management cover
(d) Outpatient coverage
(e) Daily cash cover

Correct Answer Outpatient coverage

Answer Explanation Health insurance products generally cover hospitalization. In many cases of primary care or
small procedure, hospitalization is not required. Under such cases the cover can be granted
under the outpatient coverage and hospitalization is not required.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question27 Mr. Gopal took a Mediclaim on 15th September '17 for Rs 1 lac. On 24 September '17 he
unfortunately got dengue and was hospitalized which cost him Rs 30,000. What amount
will be reimbursed to him?
(a) Rs 1 lac
(b) Rs 70,000
(c) Rs 25000
(d) Rs 30000
(e) NIL

Correct Answer NIL

Answer Explanation Under Mediclaim there is mostly a waiting period is 30 days & thus the diseases contracted
during first 30 days would not be considered.
In this case the claim would not be considered because the hospitalization is within 30 days
of the inception of the policy.

Question28 Which report has to be considered by insurance companies to watch out for conflicts of
interests while underwriting ?
(a) Commission report
(b) Medical reports
(c) Proposal form
(d) Sales report
(e) Financial documents

Correct Answer Sales report

Answer Explanation Sales personnel are also considered as grassroots level underwriters and the information
given by them in sales report can form an important consideration.
However, sales personnel have an incentive to generate more business, there is a conflict
of interest, which has to be watched out for.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question29 What % of the world health expenditure did social insurance contribute in the year 2010 ?
(As per WHO data )
(a) 18%
(b) 20%
(c) 25%
(d) 27.5%
(e) 31%

Correct Answer 25%

Answer Explanation Social insurance contributes to 25 % of the world health expenditure as per WHO report
2010. Source: National Health Accounts, WHO 2010.

Question30 If a person is above the age of years in India and he is enrolling for the first time than
he is usually required to undergo some pathological tests to assess his health risk and to
get his current health status.
(a) 40
(b) 45
(c) 50
(d) 55
(e) 60

Correct Answer 45
Answer Explanation In general, the age is 45 years but some insurance companies have devised plans where
health checkup is not required till 50 years etc.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question31 Point out the measures under technology and process interface for fraud prevention.
(a) Ability to detect fraud effectively
(b) Creation of consumer awareness
(c) Robust whistle blower policy
(d) Creation of fraud database
(e) Effective legislation and judicial action

Correct Answer Ability to detect fraud effectively

Answer Explanation Combating the fraud in insurance takes combined efforts. The measures under the
technology and process interface for fraud prevention lies its ability to detect fraud
effectively. The system should be able to detect frauds based on the rules & logic defined
to identify various frauds.

Question32 Which of these options is correct for NRHM ?

(a) NRHM was not focused for integration of vertical disease control programs
(b) NRHM was strict in terms of usage of the allotted funds by the community level bodies
(c) NRHM drained out funds from the health care schemes via united funds
(d) NRHM tries to reduce the gap between the health care available in urban and semi urban
areas
(e) NRHM tries to reduce the gap between the health care available in urban and rural areas

Correct Answer NRHM tries to reduce the gap between the health care available in urban and rural areas
Answer Explanation National Rural Health Mission (NRHM) is the most significant development in the recent
years towards the public health financing system in India. It reduced the gap between the
health care available in urban & rural area. It also attempted integration of the vertical
disease control programme under a single umbrella.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question33 Which of the below options are correct with respect to Critical Illness (CI) policy ?
1. It provides a lump sum payment on diagnosis of a covered condition
2. It can come as an Accelerated CI benefit product, as a rider to a health insurance policy
3. It can also be taken as a stand-alone CI product
(a) Only statement 1 is correct
(b) Only statement 2 is correct
(c) Only statement 3 is correct
(d) Only 1 and 2 are correct
(e) All 1, 2 and 3 are correct

Correct Answer All 1, 2 and 3 are correct

Answer Explanation A Critical illness policy can be taken as a stand-alone CI product, provides a lump sum
payment on diagnosis of a covered condition and can also come as an accelerated CI
benefit product, as a rider to a health insurance.

Question34 What is the term know as when an insurer exchanges proportional reinsurance business
with another insurer ?
(a) Retrocession
(b) Alternative risk transfer
(c) Horizontal placement
(d) Vertical placement
(e) Reciprocity

Correct Answer Alternative risk transfer

Answer Explanation When an insurer exchanges proportional reinsurance business with another insurer, this is
known as Alternative risk transfer. This is a alternative to the quota share reinsurance.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question35 cover is provided under health insurance.

(a) Medical expenses
(b) Accidental death
(c) Natural death
(d) Disability
(e) Both accidental and medical expenses are covered

Correct Answer Both accidental and medical expenses are covered

Answer Explanation Both accidental and medical expenses are covered under health insurance. The health
insurance products are classified under benefit or indemnity basis.

Question36 Which of the below option belongs to frauds at the claim settlement stage ?
(a) Change in address and contact details
(b) Submission of claim so as to seek benefit
(c) Health checks undergone
(d) Alterations in sum assured
(e) Disclosure of material information at the medical stage

Correct Answer Submission of claim so as to seek benefit

Answer Explanation There are various stages of fraud being committed. At the claim settlement stage, the fraud
is done by submitting false claim so as to seek benefit.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question37 In the European country Germany, it has been observed that over % of the residents
receive healthcare through health insurance.
(a) 75, private
(b) 90, statutory
(c) 80, social
(d) 95, out of pocket
(e) 80, commercial

Correct Answer 90, statutory

Answer Explanation In Germany, over 90% % of the residents receive healthcare through statutory health
insurance. It has the best healthcare system in the world.

Question38 When a policy holder has a complaint to make, he should first approach the .
(a) Insurance Ombudsman
(b) Local court
(c) Nodal officer
(d) Appellate officer
(e) Grievance or Consumer Complaints cell of the insurer

Correct Answer Grievance or Consumer Complaints cell of the insurer

Answer Explanation In case a policy holder has a complaint to make, he must first approach the ‘Grievance or
Consumer Complaints Cell’ of the insurer. He can explore the other options in case there is
no response or no satisfactory response.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question39 Insurance would become a gambling transaction id there was no principle of .

(a) Fixed returns
(b) Proximate clause
(c) Uberrima Fides
(d) Insurable interest
(e) Indemnity

Correct Answer Indemnity

Answer Explanation The general insurance contracts are contracts of indemnity. The insured is compensated for
the financial loss suffered by him. The absence of principle of indemnity would render the
insurance contract in to a gambling transaction.

(Principle of indemnification. A defining characteristic of insurance, providing that a loss

payment will replace what is lost, putting the insured back to where it was financially prior
to the loss without rewarding or penalizing the insured for its loss)

Question40 What could be a reason for partial reductions in claimed amount ?

(a) Lack of liquidity in insurance companies
(b) Lack of proper documentation by insured
(c) Misguided advice by TPA
(d) Lack of proper documentation by TPA
(e) Lack of proper documentation by hospital

Correct Answer Lack of proper documentation by insured

Answer Explanation The reasons for partial reductions in claimed amount is due to lack of proper
documentation by insured. If the requisite documents are made available, the claim may
be considered without un-necessary deductions.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question41 When a person has cash less medical cover, he need not keep surplus .
(a) hospital list
(b) insurance covers
(c) medicines
(d) prescriptions
(e) liquidity

Correct Answer liquidity

Answer Explanation TPA’s functions as an intermediary between the insurer and the insured and facilitate
cashless insurance services. It avoids the need to arrange a large amount of money by an
individual for payment to the hospital. The cashless cover thus minimizes the need to keep
surplus liquidity by an individual.

Question42 Which of the following is NOT a core principal and do not form an integral part of an
insurance contract ?
(a) Uberrima Fides
(b) Indemnity
(c) Benefit
(d) Insurable interest
(e) Contribution

Correct Answer Benefit

Answer Explanation The general insurance contracts are contracts of indemnity. The insured is compensated for
the financial loss suffered by him. If he gets any benefit from an insurance contract, he
would bring about the loss for getting the benefit out of the policy.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question43 Which of the below statements is/are CORRECT in relation to administrative location? This
should be in context of the regulatory system.
(a) In the context of a small country with limited regulatory manpower or in the case of
regulator dealing with integrated insurers which also underwrite non-health businesses,
having a health insurance regulator within the overall insurance regulatory structure is an
option
(b) A health insurance regulator can’t be housed within a health ministry or in an insurance
regulatory agency
(c) In the case of several countries, an independent health insurance agency located outside
the health ministry and also outside the regulatory mechanism for non-health insurance
entities is also an option
(d) Both 1 and 2 are correct
(e) Both 1 and 3 are correct

Correct Answer Both 1 and 3 are correct

Answer Explanation

Question44 A score of 4.1 was received by which of the following options in context to - 'Taking
measures for post sales dissonance of health insurance ‘Customer Feedback' ?
(a) Call recording and quality check on health telesales personnel
(b) Regular assessment of all enrolled hospitals
(c) Customer complaints & grievance handling system
(d) Process of getting online customer feedback on website
(e) Regular health insurance customer satisfaction surveys

Correct Answer Customer complaints & grievance handling system

Answer Explanation

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question45 For which type of health insurance are 'health status' and 'age' important underwriting
considerations ?
(a) Family
(b) Individual
(c) Community
(d) Corporate
(e) Group

Correct Answer Individual

Answer Explanation Under medical underwriting, health and age are important underwriting considerations for
individual health insurance.

Question46 Consider a scenario - 'The insurer is claiming that the proposer suppressed or provided
misleading or false information on any matter material to grant of a cover' . In such cases
the onus of providing the proof lies with .
(a) concerned insurance agent
(b) Signatory of the contract
(c) Insurer
(d) Insured
(e) Health care provider

Correct Answer Insurer

Answer Explanation

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question47 depends on the mix of investment options chosen by the insurer, as also the
general environment in the economy.
(a) Investment risk
(b) Liquidity risk
(c) Speculative risk
(d) Insurance risk
(e) Business environment risk

Correct Answer Investment risk

Answer Explanation Occurrence of investment risk risks depends on the mix of investment options chosen by
the insurer, as also the overall environment in the economy.

Question48 Which is the key for maintaining customer’s confidence in the ‘PROMISE OF HEALTH
INSURANCE' ?
(a) Management
(b) Advisory body
(c) Financial control
(d) Quality control
(e) Regulation

Correct Answer Regulation

Answer Explanation If health insurance is ultimately a promise, the regulation is the key to maintaining
customer’s confidence in the ‘promise of health insurance’. If an insurer fails to fulfill its
promise, the customer would lose their confidence in insurance. The regulator therefore
needs to protect this confidence.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Question49 Which of these is/are product lines of health insurance ?

1. Fixed benefit covers 2. Critical illness covers 3. Indemnity health insurance

(a) Only 1
(b) Only 2
(c) Only 3
(d) Only 1 and 2
(e) All 1 , 2 and 3

Correct Answer All 1 , 2 and 3

Answer Explanation The product line of health insurance includes all of the above i.e. Indemnity health
insurance, Critical illness cover and Fixed benefit covers.

Question50 Select the correct option (s) from below –

1. Individual policies can cover pre-existing diseases and maternity from first day
2. Group insurance policies are generally customized
3. Individual plans generally have standard terms / conditions
(a) Only Statements 1 and 3 are correct
(b) Both 1 and 2 are incorrect
(c) Only statement 2 is correct, others are incorrect
(d) Only Statements 2 and 3 are correct
(e) Statement 1 is correct; Statement 2 and 3 are incorrect

Correct Answer Only Statements 2 and 3 are correct

Answer Explanation Individual plans usually have standard terms and conditions and Group insurance policies
are usually customized or tailor made. Under group policies, maternity and pre-existing
diseases may be covered from day one which is not covered under individual plans.

Copyright WWW.TOP4SURE.IN
 -

PRACTICE TEST 4

WWW.TOP4SURE.IN IC 27 – HEALTH INSURANCE

Your feedback is valuable to us. Please write to us at

info@top4sure.in

ALL THE BEST FOR YOUR EXAMS!

Copyright WWW.TOP4SURE.IN