HEALTH INSURANCE MOCK EXAM (Fourth Edition – June 2010) - Paper A

(C2 / S3.7)
1. Which of the following is a feature of Medical Expense Insurance Policy?

A. Has no co-insurance but has deductibles.

B. Covers expensive outpatient benefits
C. Can be used as a supplementary benefits
D. Separate limits for each of the covered expenses.

(C1 / S3)
2. Ministry of Health started _________ to provide convenient and affordable healthcare for
needy elderly and disabled Singaporeans, so that such needy patients could conveniently
receive subsidized treatment at General Practitioners (GPs) and dental clinics near their
homes, without the need to travel to polyclinics.

A. Primary Care Partnership Scheme

B. Primary Healthcare
C. Integrated Care
D. Institutional Healthcare

(C1 / S2.5)
3. Government intervention in Healthcare Philosophy includes:-

I. Key operational aspects of all hospitals in Singapore

II. Charges on patient using Medisave in private hospitals
III. Medical research & development
IV. The supply of doctors and hospitals

A. I & II
B. II & III
C. III & IV
D. I & III

(C1 / S4)
4. Which of the following regarding healthcare services for the elderly is true?

A. Healthcare services for the elderly are run by the public and private sectors
B. Healthcare services for the elderly are run by the government through Eldershield
scheme.
C. Healthcare services for the elderly are run by Voluntary Welfare Organizations.
D. Healthcare services for the elderly are run by Medisave, Medishield & Medifund.

(C1 / S5.1)
5. The government provides funding to

A. All hospitals for all class wards ranging from one bedded room to open dormitories
B. Public sector hospitals and Voluntary Welfare Organizations
C. Private sector hospitals
D. All of the above

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(C2 / S3.3)
6. Mr Tan is buying a Medical Expense Insurance policy for himself and his two sons. His
wife is not included. The premium is $500 for himself and $300 for each child. What is
the discount given?

A. $55
B. $1,100
C. 0
D. $33

(C3 / S4)
7. Purpose of Portable Medical Benefit Scheme and Transferable Medical Insurance
Scheme is :-

A. To offer cheaper premium as group policies are cheaper.

B. To allow employers to claim tax deductibility for increased in medical expenses.
C. To allow employees to be covered while waiting to join his new employer.
D. To allow employees more variety in terms of choice of plans

(C3 / S4.2.2)
8. How are claims for continuation of coverage benefits under Transferable Medical
Insurance Scheme (TMIS) plan paid?

A. From the previous employer’s TMIS plan

B. From the new employer’s TMIS plan
C. From both old and new employer’s plans
D. From the lower of the either the new employer’s TMIS plan or prior employer’s TMIS
plan.

(C4 / S6.2(c))
9. Rehabilitation Expense Benefit under DI Policy includes:-

A. Workplace modifications
B. Home modifications
C. Medications
D. Hospital stay

(C4 / S5.5)
10. Benefits made under Disability Income Policy will be payable after a specific period. This
period is known as:-

A. Freelook period
B. Deferred period
C. Survival period
D. Escalation period

(C2 / S3.5)
11. Premiums are usually increased when there is –

A. Low benefits, low deductible and low co-insurance

B. High benefits, low deductible and low co-insurance
C. High benefits, high deductible and low co-insurance
D. High benefits, high deductible and high co-insurance

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(C1 / S5.1)
12. Mean testing was introduced in public hospitals to share limited class B2 and C subsidies
in a fair manner with the lower-income group. Which of the following service(s) will be
mean tested?

I. Day Surgery
II. Accident & Emergency (A&E) services
III. Specialist Outpatient
IV. Polyclinic visits

A. I, II & III
B. II, III & IV
C. I, III & IV
D. All of the above

(C3 / S3 / Table 3.1)

13. An employee who marries after the commencement of his Group Medical Expense
Insurance can include the spouse in the policy

A. Anytime after a specified period (30 days) after marriage

B. Only upon renewal of the policy
C. By making application for another individual plan
D. Anytime within a specified period (30 days) after marriage

(C9 / S5.10)
14. Under the reinstatement provision of a policy, which of the following is NOT true?

A. Insurer will reinstate the policy once all overdue premiums due are paid & approved.
B. Insurer can decline to reinstate the policy
C. Exclusions cannot be imposed but coverage can be limited
D. Insurer will evaluate the reinstatement application

(C5 / S4)
15. Extended Care Benefit packaged with LTC offers

A. extra monthly benefits payable every 3 or 5 years

B. daily benefit payable if insured is hospitalised
C. specified amount if insured goes for surgical procedures
D. specified amount if the use of assistive devices is required

(C8 /S3.1)
16. Which of the following statement is NOT true about ElderShield?

A. Its objective is to defray out-of-pocket expenses in the event of severe disabilities.

B. It is an opt out scheme
C. Purpose is to subsidize nursing home care for elderly run by VWOs
D. Selected Private Insurers will run this scheme

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(C7 / S5 / Figure 7.4)

17. Arrange in descending order in terms of degree of choice of healthcare providers:

I. Staff Model
II. IPA
III. Network Model
IV. POS

A. I – II – III – IV
B. IV – III – I – II
C. IV – II – III – I
D. I – III – II – IV

(C4 / S6.2(f))
18. Payment of death benefit for Disability Income policy will be made

I. during the term of the policy

II. during the benefit period
III. on commencement date of policy

A. I only
B. I & II only
C. II only
D. All of the above

(C6 / S3.6)
19. Hospital Cash cover will terminate except when:

A. a claim is made
B. benefit amount exceeds per life-time limit
C. premium not paid after grace period
D. insured exercises one of the non-forfeiture options

(C4 / S6.2(b))
20. Mr Ng used to earn $10000 per month before he was disabled. He received $7500 a
month for two years during which he was totally disabled. In the third year, he found a
job as a clerk, which pays him $1500/month. What would Mr Ng’s total monthly income
be?

A. $7500
B. $6375
C. $7875
D. $1500

(C3 / S2)
21. Which of the following characteristics of group insurance is/are true?

I. Group insurance is issued under a multiple of contracts called “master contract.”

II. It may require employee to complete a health declaration form.
III. It is cost ineffective as it provides low cost protection due to savings in admin cost.
IV. Underwriter waives all underwriting & relies on pre-existing condition clauses to avoid
anti selection.

A. I & II
B. III & IV
C. II & IV
D. I & III

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(C3 / S2)
22. Most group policies have an “Actively At Work” clause. It states:-

A. An employee to be at work on the day the insurance coverage is effective.

B. If an employee is on sick leave or annual leave, he will still be covered by the group
policy.
C. An employee must be working on a full time basis.
D. Both full and part-time with a probationary period of one to six months will be eligible
to enroll in group insurance plans.

(C3 / S3.1)
23. Which of the following are advantages of compulsory plan?

A. Ease of administration, as payroll deductions are monitored by the company.

B. Generates interest & appreciation from participating employees.
C. Lower costs due to less admin work and greater pooling effect of risks.
D. Employers assume part of the cost.

(C3 / S4)
24. Which of the following is true of Portable and Transferable Medical Benefits for
employees?

A. To provide employee with a cover while waiting to join his new employer.
B. Government grants employers tax deductibility for medical expenses up to 3 % of
their total payroll.
C. To ensure that the medical benefits of the employee who left his company will not be
terminated at all cost.
D. Employers who choose not to implement these schemes, their tax deductibility for
medical expenses is only up to 2% of their total payroll.

(C3 / S4.3)
25. Which of the following differences between Portable Medical Benefit Scheme (PMBS)
and Transferable Medical Insurance Scheme (TMIS) is/are true?

I. Employee purchases policy on his own under PMBS.

II. Coverage expires at statutory retirement age under TMIS.
III. Coverage continues as long as premium is paid under TMIS.
IV. Treatment for pre existing illnesses is excluded for both plans.

A. I & II
B. II & III
C. III & IV
D. I & IV

(C12 / S2)
26. Which of the following products do MAS Notice 120 covers?

I. Personal Accident Insurance

II. Long Term Care Insurance
III. Travel Insurance
IV. Hospital Income Insurance

A. All of the above

B. I, II & IV
C. II & IV
D. I & II

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(C15 / S2.1)
27. Calculate Maintenance Cost given :-

Monthly Salary is $3000; Monthly Expenses is $1,500

Rate of return is 5%; Inflation rate is 2%
Number of years income needed is 21
Funds available is $100,000; Existing Insurance is $50,000

A. $127,470
B. $285,840
C. $378,000
D. $242,280

(C9 / S8.3)
28. Legal Actions Provision in a Individual Health Insurance Policies describes:

A. The “rightful amount” the claimant is entitled to sue under the policy.
B. Limits the time a claimant can sue the insurer for an amount under a policy.
C. The Insurer’s right to sue the claimant for non disclosure.
D. The Insured’s right to have his legal fees fully paid by the insurer in the course of a
dispute.

(C9 / S5.7.1)
29. A representative need to highlight that a cancellable type of policy implies :-

A. Insured has the right to cancel the policy anytime.

B. Insurer cannot unilaterally terminate.
C. Insurer has the right to terminate the policy at any time.
D. Insurer cannot decline to renew the policy unless because of insured’s health status.

(C14 / S3)
30. Which of the following is FALSE regarding “Fact Finding”?

A. Knowing client’s objective is important, as the representative is suppose to help him

achieve his objectives.
B. Employment status will determine affordability of premium and whether he is eligible
to apply for insurance.
C. Knowing the income will serves as a starting reference point for all further
recommendations.
D. Current medical condition will determine if client is insurable.

(C7 / S4.2)
31. What is the difference in Preferred Provider Organisations (PPOs) when compared to
Health Maintenance Organisations (HMOs)?

I. Members in PPOs do not have a Primary Care Physicians (PCPs)

II. Members in PPOs are not restricted to use only the network providers
III. Members in PPOs will enjoy financial incentives if they see a network provider
IV. Members in PPOs require no referral to see a specialist

A. I, II & III
B. II, III & IV
C. I, III & IV
D. All of the above

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(C2 / S3.8)
32. The geographical limit of the medical expense insurance states that

A. insurers will not pay for medical treatments if the insured has resided outside of
Singapore longer than the specified time allowed
B. the policy will be automatically terminated if an insured resides outside Singapore for
more than a specified period of time
C. The policy will be terminated if the insured is a Permanent Resident or non Singapore
Citizen
D. the insured will not be allowed to renew his policy if he is outstation beyond the
specified period

(C9 / S9)
33. An endorsement is a separate document that:

I. modifies the policy to which it is attached

II. serves as a supplementary agreements to provide optional benefits not previously
contained in the basic policy
III. can restrict the scope of the coverage

A. I only
B. I & II only
C. All of the above
D. None of the above

(C6 / S2.3.1)
34. An acceleration benefit dread disease policy provides the insured with the following
coverage(s);

I. Lump sum payment of the basic sum assured plus bonus (if any) upon diagnosis of
any insured disease.
II. Lump sum payment of basic sum assured plus bonus (if any) upon death.
III. Lump sum payment of basic sum assured plus bonus (if any) upon TPD.

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

(C6 / S2.2)
35. Which of the following is a similar feature for Acceleration Benefit and Additional Benefit
of Dread Disease Cover:

A. Sum assured will not be affected by the payment on diagnosis of dread disease
B. Can be issued as riders only
C. Assignment may or may not be allowed
D. Dread disease sum assured can exceed the basic sum assured

(C8 / S2.2.4)
36. Mr Lim will be going for an operation. To make a claim under the MediShield policy on
the expenses incurred for the operation, he has to:

A. Produce proof of his age

B. Inform the hospital of his intention
C. Submit original receipt to MediShield
D. Submit original receipt to CPF Board

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(C5 & C7)

37. Long Term Care Insurance is similar to Managed HealthCare in that:

A. It is a non-participating policy
B. It is a benefit payable on top of another insurance policy
C. It does not have a deductible and co-insurance
D. It excludes AIDS (infected from whichever way)

(C4 / S8)
38. To purchase a Disability Income Insurance policy, both the employed and self-employed
have to furnish the following documents:

I. Notice of Assessment
II. Large Amount Questionnaire, if annual benefit is more than $60,000
III. Letter from company accountant

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

(C5 / S3.2.1)
39. The criteria for benefits payable under Long Term Care Insurance include:

I. Need to be hospitalised to qualify for LTC benefits

II. Advanced dementia
III. Inability to perform some Activities of Daily Living (ADL)

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

(C4 / S5.5)
40. Which of the following people will benefit the MOST from the shortest deferred payment
period under a Disability Income Plan?

A. clerk
B. accountant
C. CEO of an MNC
D. boss of a small family run business

(C13 / S1)
41. LIA & GIA Guidelines are issued because:-

A. To set a high standard for insurance representatives with regard to the marketing and
sale of A& H products.
B. To help the intermediaries & representatives to comply with MAS Notice 120.
C. To set a special set of guidelines independent of MAS Notice 120.
D. To help intermediaries & representatives and it is non mandatory with no penalty.

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(C13 / S2.1.1)
42. For Individual Business, which of the following is/are requirements for insurance
representatives to observe during the pre-sale stage?

I. Provide your Guide to Health Insurance

II. Conduct a fact-find and needs analysis using the “A&H Fact-Find Form provided by
the insurer.
III. Provide Relevant Product Summary.

A. All of the above

B. I & II
C. II & III
D. I & III

(C13 / S2.1.1)
43. Which of the following form is required for complying with “Know Your Client” requirement
under MAS Notice 120 for Individual Business?

A. Fact Find Form

B. Your Guide to Health Insurance
C. Product Summary
D. A&H Fact Find Form

(C13 / S2)
44. Which of the following products were exempt from the advisory process under MAS
Notice 120?

I. A&H products sold through telemarketing and direct marketing

II. Pure Personal Accident Products
III. Eldershield
IV. Hospital Cash (Income) Policy with benefits payable due to accident & sickness.

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

(C13 / S2.1.5)
45. As required by the Post Sale Requirements, for sales through the representatives, what
are the insurer required to do the regarding modifications?

A. Show only modified benefits terms to policyholders.

B. Give advance written notice of not more than 30 days before effecting modifications.
C. Highlight to policyholders if original benefits have been withdrawn or new exclusions
added only if there is a change in premium rates.
D. Policyholders are given the option to reject the modified terms and cease cover.

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(C2 / S3.13(b) & C6 / S5.4)

46. Which of the following products are subjected to the “Co-Ordination of Benefit” Clause?

I. Medical Expense Insurance

II. Long Term Care Insurance
III. Group Dental Care Insurance
IV. Dread Disease Insurance

A. I & II
B. II & III
C. I & III
D. II & IV

(C15 / S2.1)
47. Which of the following should be recommended to Mrs.Tan a housewife, to help her with
the provision of maintenance costs if she is disabled?

I. Life Policies
II. Personal Accident Policy
III. Disability Income Insurance
IV. Long Term Care Insurance

A. I & II
B. II & III
C. III & IV
D. All of the above

(C15 / S2.1)
48. Mdm Tan monthly income and expenses are $3000 and $2000 respectively. She is
currently 40 years old and has a 10 year old boy. She would need to support her son till
age 25. Assuming the annual inflation rate is 2% and interest rate is 5%, calculate the
maintenance cost required on Mdm Tan’s disablement.

A. $286,510
B. $360,000
C. $259,200
D. $430,560

(C15 / S3)
49. Which of the following method is easier to manage in determining the sum assured for
group health insurance?

A. According to rank
B. Number of times of employee’s basic salary
C. According to years of service
D. According to employer’s budget

(C14 / S7)
50. Conducting regular reviews for client is important because:-

A. It will ensure that they continue to receive quality service from you and hence
guaranteeing the right product recommended.
B. Of the change in client’s personal circumstances.
C. Original products purchased by client are too expensive.
D. Of launching new products in your company

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SET A -ANSWERS

1. D 21. C 41. B
2. A 22. A 42. A
3. C 23. C 43. A
4. C 24. A 44. A
5. B 25. A 45. D
6. A 26. B 46. C
7. C 27. A 47. A
8. A 28. B 48. A
9. A 29. C 49. A
10. B 30. C 50. B
11. B 31. D 51.
12. D 32. B 52.
13. D 33. C 53.
14. C 34. A 54.
15. A 35. C 55.
16. C 36. B 56.
17. C 37. A 57.
18. C 38. A 58.
19. A 39. C 59.
20. C 40. D 60.

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

Discount is 5% of Total premiums = 5% x $1,100 = $55

Q20. Pre-Disability Earning – Present Earnings

-------------------------------------------------- X Total Disability Benefit
Pre-Disability Earnings
= ($10,000 - $1,500) X $7,500
$10,000
= $6,375

Total monthly income = $6,375 (From DI policy) + $1,000 (From employment)

= $7,875

Q27. Yearly Income needed = $1,500 X 12 = $18,000

Fund needed = $18,000 X 15.4150 (Table A2, i=3%, Year=21)
= $277,470
Maintenance Cost = $277,470 - $150,000 = $127,470

Q48. Yearly expenses = $2,000 X 12 = $24,000

Number of years to support her son = 25 - 10 = 15
Net interest = 5% - 2% = 3%
Maintenance Cost = $24,000 X 11.9379 (Table A2, i=3%, Year 15)
= $286,510

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