CMFAS HEALTH INSURANCE

(4th Edition)

Mock Exam 3

AXA Life Insurance Singapore Pte Ltd

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For Internal Use Only. Based on 4th Edition Text (June 2010)
Health Insurance Mock Exam 3

(C1 / S3.1.1)
1. What is the function of the Agency for Integrated Care (AIC)?

A. To smoothen the transition of MOH partners from one care setting to another.
B. To smoothen the transition of MOH stakeholders from one care setting to
another.
C. To smoothen the transition of patients and patients’ family doctor from one
care setting to another.
D. To smoothen the transition of patients from one care setting to another.

(C2 / S3.5)
2. Which of the following Medical Expense Insurance is MOST suitable for a client
who is a self-employed?

A. Policy with no deductible

B. Policy with no co-insurance
C. Policy with no expense participation
D. Policy with expense participation

(C5 / S3.1(a))
3. If you know that your client has Long Term Care Insurance, you should also find
out whether

A. he has other sources of disability income

B. the deferred period is right for him
C. the benefits payable are on a serviced-based basis
D. the policy has deductible and co-insurance features

(C11 / S3.3.3)
4. The detection of any early cognitive impairment and morbidity risk are is
essential when underwriting

A. Critical Illness Insurance

B. Disability Income Insurance
C. Long Term Care Insurance
D. Managed Healthcare Insurance

(C6 / S5.3)
5. Group Dental Insurance usually does NOT cover

A. Scaling and polishing of teeth

B. Wisdom tooth extraction
C. Pre-existing conditions
D. Replacement of stolen dentures

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Health Insurance Mock Exam 3

(C2 / S3.3)
6. If Mr Tan is buying a policy for himself at $500 and his two sons at $300 each.
He is given a 5% family discount. Calculate the total premium Mr Tan needs to
pay.

A. $760
B. $1,045
C. $1,100
D. $1,075

(C11 / S2)
7. Underwriting is an important process because

A. help to protect the insurer against anti-selection and in the preservation of the
insurer’s reserves.
B. to ensure that the premium charged corresponds with the risk involved.
C. the re-insurance limits will not be exceeded.
D. the insurer will make substantial profits.

(C11 / S4.1.1(v))
8. Declaration of a Proposal Form serves a number of purpose as follows:

A. that the applicant has disclosed all material facts truthfully and faithfully in the
proposal form
B. that the applicant has not withheld any material facts
C. that the applicant agrees and authorizes the insurer to release to any medical
source, insurance companies & vice versa any information regarding him at
any time regardless whether proposal is taken up.
D. All of the above

(C5 / S3.2.1(a)(vi))
9. Definition of performing transferring includes:

A. using the lavatory, and moving indoors from room to room on level surfaces
B. moving indoors from room to room on level surfaces
C. move from a bed to an upright chair or wheelchair and vice versa
D. moving indoors from room to room onto different level surfaces

(C6 / S2.1(g))
10. The insured must survive the survival period before the critical illness
benefit becomes payable. The survival period is a period of time:

A. from the date of policy issue

B. from the date of any reinstatement of the policy
C. from the date of inception
D. from the occurrence of a critical illness

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Health Insurance Mock Exam 3

(C7 / S4.1.4)
11. Which one of the following models do the physicians actively continue to
develop their own private practices?

A. Staff Model HMO

B. Group Model HMO
C. Independent Practitioners Association (IPA) HMO
D. Network Model HMO

(C7 / S3.2(a))
12. Under this method, the MHC pre-pay the providers a flat amount for each
member’s medical care usually on a monthly basis.

A. Capitation
B. Discounted-fee-for-service
C. Salary
D. Fee schedule

(C6 / S2.3.1)
13. Mr Tan has a Critical Illness coverage with a 50% acceleration benefit. The life
insurance policy also has a waiver of premium upon total and permanent
disability. After a critical illness claim by Mr Tan, which of the following
statement(s) regarding the premium is/are FALSE?

A. Premium remains unchanged

B. Premium still needs to be paid for the remaining term of the policy
C. Premium is reduced in proportion to how the basic sum assured is reduced.
D. All of the above

(C4 / S6.2(d))
14. David has a monthly income of $6,000 and has bought a Disability Income policy
at 75% of his monthly income with a 3% escalation benefit. He is disabled and
made a claim successfully on 1-1-2000. What is the amount that he will receive
on the 1-3-2001?

A. $4,500
B. $6,000
C. $4,635
D. $4,770

(C2 / S2)
15. Which of the following plans is NOT a plan that reimburses policy owners
for expenses incurred as a result of an illness or accident?

A. MediShield
B. Medical Expense Insurance
C. Managed Healthcare Scheme
D. Hospital Cash Insurance

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Health Insurance Mock Exam 3

(C6 / S4.3)
16. Which of the following are services provided under the 24-hour Worldwide
Emergency Assistance Service in the Medical Expense Benefits under
Travel Insurance?

I. medical advice
II. referral to doctors, specialists and hospitals
III. hospital deposit guarantees

A. I & II only
B. I & II only
C. II & III only
D. I, II & III

(C6 / S3.3.1)
17. Which of the following is/are benefit/s offer under stand-alone Hospital
Cash Insurance

A. double payment if insured stays in the intensive Care Unit (ICU)

B. triple payment if insured is hospitalized overseas due to accident
C. free accidental death benefit
D. All of the above

(C15 / S2.1)
18. Mr Tan is aged 30. He has income and expenditure of $5,500 and $2,500
respectively. He wants to maintain his income to age 65 62 should he be
disabled. Assuming that the interest rate is 4% and inflation is 2%, what is the
maintenance cost?

A. $551,771
B. $638,123
C. $749,958
D. $814,149

(C5 / S7 & C6 / S5)

19. Long Term Care Insurance is similar to Group Dental Care in that they:

A. do not cover pre-existing conditions

B. can be issued on standalone or rider basis
C. do not cover pre-existing conditions, and can be issued on standalone or
rider basis
D. do not pay in addition to other insurance

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Health Insurance Mock Exam 3

(C4 / S7 & C5 / S7)

20. Disability Income is similar to Long Term Care in that:

A. the premiums payable remain the same through the policy period.
B. If insured recovers from the disability, payment will stop but policy will not be
terminated.
C. they cover hospitalization charges.
D. All of the above

(C10 / S3)
21. Which one of the following statements about the parameters in pricing of Health
insurance is TRUE:

A. Increase in proportion of females in a group will reduce the premiums.

B. Increase in morbidity experience will reduce premiums.
C. Increase in persistency will decrease premiums.
D. Increase in participation rate will increase premiums.

(C5 / S3.2.2)
22. In Long Term Care insurance, the deferred period is defined as a period of time:

A. that he is unable to perform a specified numbers of ADLs.

B. from the inception of the policy or any reinstatement of the policy
C. after the insured becomes a nursing insured due to accident, chronic disease
or permanent health defect.
D. from the time the insured is hospitalised.

(C3 / S2.1)
23. With effect from 1st January 2010, the required minimum amount of medical
insurance for each S Pass holder and Work Permit holder is __________.

A. $5,000
B. $10,000
C. $15,000
D. $20,000

(C4 / S11)
24. Disability Income will not terminate when the insured:

A. changes his occupation.

B. resides outside Singapore for a specified period of time.
C. is unemployed for a period of time.
D. has not paid up his premiums due after the grace period.

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Health Insurance Mock Exam 3

(C7 / S6.1)
25. Managed Healthcare offers the following benefits:

A. Primary Care only

B. Preventive Care, and Emergency Care
C. Primary Care, Emergency Care, Specialist Care
D. Primary Care, Preventive Care, Emergency Care, Specialist Care

(C8 / S4.1)
26. Mr Tan is 60 years old and is unable to pay his hospital bill. He can seek
assistance from:

A. Interim Disability Programme for the Elderly (IDAPE)

B. Eldershield
C. Medifund
D. Mediguard

(C1 / S4)
27. Healthcare services for the elderly are mostly run by:

A. Interim Disability Programme for the Elderly (IDAPE)

B. Voluntary Welfare Organisations
C. Eldercare Fund
D. Mediguard

(C1 / S2)
28. Government's healthcare philosophy is based on:-

A. to nurture a healthy nation by promoting good health

B. promote personal responsibility and avoid over-reliance in state welfare
C. rely on competition and market forces to improve service and raise efficiency
D. All of the above

(C4 / S12)
29. Which of the following documents is NOT a requirement by insurer when a claim
is made under Disability Income Insurance?

A. Hospital Bill
B. Clinical Abstract Form
C. Copies of Medical Certificates
D. All available Laboratory and Tests results

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Health Insurance Mock Exam 3

(C9 / S5.12)
30. Under the Change of Occupation provision, the insurer is permitted to change
which of the following when the insured changes to a less hazardous
occupation:-

A. increase the maximum benefit amount

B. reduce the premium rate
C. decline the insurance coverage
D. cancel the policy

(C5 / S3.2.1(a)(v))
31. In Long Term Care insurance, ‘Mobility’ refers to:-

A. ability to move from a be to upright chair or vice-versa

B. ability to move indoors from room to room on level surfaces
C. ability to use the lavatory
D. ability to put on or take off all garments

(C7 / S6.5)
32. When making a claim under Managed Healthcare, the documents to be provided
are:-

A. original itemised medical bill

B. claimant's NRIC
C. letter from employer
D. letter from Attending Physician confirming the necessity of the treatment

(C11 / S4.3)
33. A medical examination is normally required for:-

A. Long Term Care Insurance

B. Basic Medical Expense Insurance
C. Major Medical Expense Insurance
D. Managed Healthcare

(C8 / S2.1.1 (j))

34. Withdrawal limit for buying an integrated private shield from a CPF member’s
Medisave account is ________ per insured member per policy year if the insured
member is below 81 years old (age next birthday), or ________ if he is 81 years
old (age next birthday) and above, to pay for the premiums of any of the CPF
approved medical insurance schemes.

A. $600, $800
B. $800, $1,150
C. $1,150, $2,500
D. $2,500, 3,500

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Health Insurance Mock Exam 3

(C8 / S3.1)
35. Which of the following is NOT an increased in the insured’s coverage under an
ElderShield Supplement?

A. Increase the monthly payout

B. Extend the payout method
C. Combination of A and B
D. Reduce the deferred period

(C9 / S4.2k)
36. Which statement(s) is/are TRUE about Moratorium Underwriting?

A. Insured do not need to make any medical declaration when they apply for
coverage
B. Pre-existing conditions can be covered after a continuous period (e.g. 5
years) from the coverage start date, reinstatement date, or date of upgrade of
plan, whichever is later
C. For a specified number of years, the insured must not experienced any
symptom, seek consultation, or receive treatment or medication for the
condition
D. All of the above

(C11 / S3.4.7 & C15 / S3)

37. Employer X wanted to buy Medical Expense Insurance for his 5 employees. The
following is required:

A. Employees do not need to go for medical examination

B. Each employee will need to complete a health declaration form
C. A group fact find form will need to be completed
D. All of the above

(C4 / S14)
38. The underwriter will look at the following factors when underwriting Group
Disability Income Insurance:

A. Age of individual employee in the company

B. Nature of the company’s business
C. Nature of work of each employee
D. All of the above

(C11 / S6.2.1)
39. Several options under modification of cover include:

A. Charge extra premiums only

B. Increase expense participation on the policy only
C. Charge extra premiums, and Increase expense participation on the policy
D. Charge extra premiums, and Reduce premium-paying period

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Health Insurance Mock Exam 3

(C15 / S2.1)
40. Miss X’s monthly income and expenses are $4,000 and $3,000 respectively. She
is 32 yrs old, single and would like to provide for herself till retirement (55 yrs old)
in the event of disability. She has an existing $100,000 Critical Illness cover.
Given an inflation rate of 2% and interest rate of 4%, calculate the maintenance
cost needed in the event of critical illness.

A. $431,123
B. $558,519
C. $614,520
D. $780,152

(C11 / S3.3.5)
41. Which of the following is the strong factor for underwriting Managed Healthcare
covers?

A. Age and Gender Demographics

B. Insured Company’s Nature of Business
C. Group Size
D. Expected Persistency

(C13 / S2.1.1(a))
42. The fact find form will enable the representative to:-

A. Comply with the “Know Your Client” requirement under MAS Notice 120.
B. Ask for a new fact find form if the information is within 3 or 6 months from
date of signing.
C. Have a reasonable basis for recommending the cheapest product to him.
D. Measure if client is aware of the facts about policies that he is going to
purchase.

(C13 / S2.1.1(b))
43. For Individual Business, which of the following must be provided to the insurer at
the close of a sale by the representatives?

A. Your Guide to Health Insurance, and Fact Find Form

B. Fact Find Form, Product Summary, and Our Advice and Reasons Why Form
C. Fact Find Form, and Our Advice and Reasons Why Form
D. Your Guide to Health Insurance, Fact Find Form, Product Summary, and Our
Advice and Reasons Why Form

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Health Insurance Mock Exam 3

(C13 / S2.2.1(a))
44. Which of the following should an Insurance Executive perform, during the Pre-
Sales Stage for Corporate Business?

A. Disclose your status only

B. Use the Group Fact Find Form, and Do a needs analysis using “Our Advice &
Reasons Why” Form
C. Disclose name of insurer, and Use the Group Fact Find Form
D. Disclose your status, Disclose name of insurer, Use the Group Fact Find
Form, and Do a needs analysis using “Our Advice & Reasons Why” Form

(C13 / S3)
45. Penalties for representatives who have not submitted the completed fact find
form and our advice & reasons why form include:-

A. Termination of contract for both LIA & GIA members

B. 3 months suspension for representatives of LIA members only.
C. Counselling for representatives of both LIA & GIA members
D. Re- training on Life Insurance

(C15 / S2.1)
46. Which of the following product is often associated with providing maintenance
costs for a client?

A. Disability Income Insurance

B. Critical Illness
C. Hospital Cash Insurance
D. Managed Healthcare Insurance

(C14 / S4.1.5(ii))
47. Mrs Tan was recently hospitalized for 8 days for an operation. Her total bill
incurred was $2,400 for Room & Board and surgery of $20,000. She has
received $11,000 reimbursement from her company group Hospital & Surgical
Policy Plan. Her own policy covers for room & board of $250 per day and surgery
of $10,000. Assuming, no deductibles nor co-insurance under her policy, how
much can Mrs. Tan receive from her own insurer?

A. $12,000
B. $11,400
C. $22,400
D. $30,000

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Health Insurance Mock Exam 3

(C15 / S3)
48. Which of the following method is fairer in determining the sum assured for group
health insurance?

A. Employee’s Salary X Performance Factor

B. Employee’s Salary X Standard Factor
C. According to Rank
D. Lower position; higher sum assured.

(C12 / S4.1.1)
49. Before the fact find, what must you disclose?

A. Your business name and address

B. Which agency you belong to
C. Your remuneration
D. Any actual or potential conflict of interest

(C15 / S3)
50. Employer wants to take into account the length of the service when buying a
group insurance for his staff. Which method of will you recommend?

A. According to rank
B. Number of times of the employee’s basic salary
C. Utilisation
D. Capitation

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Health Insurance Mock Exam 3

Mock Exam 3 Answers

1. D 26. C
2. C 27. B
3. C 28. D
4. C 29. A
5. D 30. B
6. B 31. B
7. B 32. A
8. D 33. A
9. C 34. B
10. D 35. D
11. C 36. D
12. A 37. C
13. A 38. D
14. C 39. C
15. D 40. B
16. D 41. A
17. D 42. A
18. C 43. B
19. B 44. C
20. B 45. C
21. C 46. A
22. A 47. B
23. C 48. B
24. A 49. D
25. D 50. A

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Health Insurance Mock Exam 3

Q6. Total premium = $500 + $300 + $300 = $1,100

Discount 5% = 5% X $1,100 = $55
Total premium Mr Tan needs to pay = $1,100 - $55 = $1,045

Q14. For Y2000, disability benefit per month = 75% X $6,000 = $4,500
For Y2001, disability benefit per month = $4,500 + 3% X $4,500 = $4,635

Q18. Yearly expenses = $2,500 X 12 = $30,000

No. of years = 65 – 30 = 35
Net interest = 4% – 2% = 2%
Maintenance Cost = $30,000 X 24.9986 (Table A2, i=2%, Year=35)
= $749,958

Q40. Yearly expenses = $3,000 X 12 = $36,000

No. of years = 55 – 32 = 23
Net interest = 4% – 2% = 2%
Fund Required = $36,000 X 18.2922 (Table A2, i=2%, Year=23)
= $658,519
Maintenance Cost = $658,519 – $100,000 = $558,519

Q47. Total bills = $2,400 + $20,000 = $22,400

Group H&S = $11,000
Own Policy = $250 X 8 + $10,000 = $12,000
After taking into Group H&S = $22,400 – $11,000 = $11,400
Since this figure is lower than $12,000, the amount payable by insurer will be
$11,400

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