HI Mock Exam 4

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The document appears to contain a mock exam for an AXA Life Insurance health insurance qualification, covering various topics related to health insurance.

The document is a mock exam to test knowledge of health insurance topics for an AXA Life Insurance qualification.

The mock exam covers topics such as managed healthcare, dread disease insurance, disability income insurance, hospital cash insurance, fact-find forms, and more.

CMFAS HEALTH INSURANCE

(4th Edition)

Mock Exam 4

AXA Life Insurance Singapore Pte Ltd

AXA Life Singapore Pte Ltd 1


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

(C11 / S3.3.4)
1. Family history is MOST important in which of the following :

A. Managed Healthcare Insurance


B. Dread Disease Insurance
C. Disability Income Insurance
D. Hospital Cash Insurance

(C13 / S2.1.1)
2. Which of the following is TRUE about Fact-Find Form?

A. It must be given to the prospective client at the point of signing the Fact-Find
Form
B. It cannot be reused when the client later decided to buy additional A&H
products
C. It can be reused when the client later decided to buy additional A&H products
D. It can be reused when the client later decided to buy additional A&H products
within 3 or 6 months from the date of signing the Fact-Find Form

(C15 / S2.1)
3. Mr Tan has a monthly income and expenditure of $7,000 and $5,000
respectively. His son is currently 2 years old and he would like to provide
for his son till age 25. Assuming that the interest rate is 5% and inflation is
2%, please calculate his maintenance cost.

A. $ 849,600
B. $ 986,616
C. $1,119,600
D. $1,422,960

(C9 / S5.7.2)
4. An Optionally Renewable Health Insurance Policy gives the insurer the
right to terminate the policy when :

A. a claim has been made


B. the insured reaches a certain age
C. the insured changes his employment status
D. it is the policy anniversary date or any premium due date

AXA Life Singapore Pte Ltd 2


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

(C7 / S5 / Figure 7.4)


5. Arrange in an ascending order in terms of the degree of choice of
healthcare providers:

I. Staff Model
II. Group Model
III. Network Model
IV. Independent Practitioners Association (IPA)

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

(C6 / S6.1)
6. Which of the following benefits are offered by insurers offering Managed
Healthcare plans:

A. Dental Care
B. Preventive Care
C. Secondary Care
D. All of the above

(C2 / S3.5.1)
7. Mr Tan has a basic Medical Expense Insurance policy, which has a $500
deductible from 1 January to 31 December 2002. At the beginning of the
year, he was hospitalised and the charges amounted to $200. Recently,
he was warded and the charges amounted to $600. What is the total
benefits payable by the insurer, assuming the per annum deductible is
used?

A. $100
B. $300
C. $500
D. $800

(C9 / S4.1)
8. The Insuring Clause states :

A. The conditions under which the benefits will be paid


B. The details of the policy owner, insured as well as insurance coverage.
C. That the present contract, together with any stipulated attachments,
makes up the entire contract
D. That the policy will terminate if an insured resides outside Singapore
for more than a specified period of time

AXA Life Singapore Pte Ltd 3


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

(C11 / S3.3.5)
9. Which one of the following factors is MOST important when underwriting
Managed Healthcare Group Insurance?

A. Insured Company’s Nature of Business


B. Level of Participation
C. Age and Gender of the group
D. Employee classes

(C10 / S2)
10. What are the key factors used in premium computation?

A. Morbidity experience - insurer’s profit - medical inflation


B. Operating expenses - Mortality experience – Investment Income
C. Mortality experience – Medical inflation – Modes of premium payment
D. Mortality experience – scope of benefits covered – insurer’s profit

(C9 / S4.2(k))
11. Pre-existing condition is usually defined as a condition:

A. In respect of which the insured showed symptoms


B. For which the insured received treatment or medical advice
C. Of which the insured should reasonably have been aware
D. All of the above

(C5 / S3.2.1(a)(ii))
12. The definition of Dressing, in one of the Activities of Daily Living, means
the ability to:

A. Brushing teeth
B. Combing hair
C. Put on artificial limbs or medical appliances
D. Putting on make-up

(C4 / S6.2(c))
13. Rehabilitation Expense Benefit refers to payment for:

A. Medical Aids
B. Training Courses
C. Workplace Modifications
D. All of the above

AXA Life Singapore Pte Ltd 4


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

(C5 / S3.2.1(b))
14. Which of the following condition is covered by Long Term Care Insurance?

A. Parkinson’s disease
B. Neurosis
C. Psychiatric illness
D. Dementia arising from organic reason

(C2 / S3.5.1)
15. When one is required to pay a deductible regardless of the no. of claims made in
a year, this type of deductible is known as:

A. Per Annum Deductible


B. Per Disability/Per Year Deductible
C. Per Disability/ Per Claim Deductible
D. Per Disability/Per Annum Deductible

(C5 / S5.4, S5.5 & S6.2(d))


16. To make disability insurance more affordable to your client, you can recommend

A. No escalating benefits
B. Longer Benefit Period
C. Shorter Deferred Period
D. All of above

(C8 / S2.1.1)
17. If a person is unable to pay for his medical bills, he could

A. Use his spouse’s Medisave


B. Use his spouse’s and children’s Medisave
C. Use sibling’s Medisave
D. All of the above

(C8 / S4.1)
18. What is the purpose of Medifund?

A. For the poor & needy to pay their medical bills


B. Interim Disability Assistance Programme to help the elderly to cope with their
medical expenses in the event that they suffer a severe disability
C. To enable minors whose money is being held by Public Trustee's office, to
consult general practitioners
D. Subsidize nursing home care for the elderly run by VWOs

AXA Life Singapore Pte Ltd 5


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

(C11 / S5)
19. An adviser can expedite the underwriting process by

A. sending the insured for medical examination


B. extracting as much detail as possible from the insured if he is seeing a
doctor for his diabetes
C. calling for an Attending Physician’s Statement on behalf of the
underwriters
D. getting the profit / loss statement if the insured is a self employed

(C5 / S3.1)
20. Long Term Care Insurance usually pays benefits on a:

A. monthly basis
B. daily basis
C. disability based basis
D. All of the above

(C5 / S4)
21. When a person requires an assistive device, which of the following benefits
available under a Long Term Care plan could provide it?

A. Rehabilitation Benefit
B. Extended Care Benefit
C. Surgical and Prosthesis Device
D. Financial Assistance with Adaptation

(C6 / S2)
22. Dread Disease Insurance can be added to which of the following type of
policies?

A. Whole Life policy


B. Term policy
C. Investment-link policy
D. All of the above

(C8 / S2.1.1)
23. Which of the following outpatient expenses can Medisave be used to pay?

A. Maternity Charges, Psychiatric treatment


B. Chronic Disease Management Programme, Psychiatric treatment
C. Day Surgery Charges, Psychiatric treatment
D. Maternity Charges, Chronic Disease Management Programme, Day
Surgery Charges, Psychiatric treatment

AXA Life Singapore Pte Ltd 6


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

(C7 / S6.1)
24. A Specialist Care Benefit under Managed HealthCare offers:

A. Normal medical assistance


B. Specialist referral and treatment
C. Special Dental services
D. 24 hr Emergency and Accident services

(C9 / S5.8)
25. What will the insurer do when they discover that the insured has
understated his age?

A. Increase premium
B. Reduce benefit
C. Cancel the policy
D. Call for medical examination and re-underwrite the application

(C2 / S3.6)
26. The benefit for an employee under the Group Medical Expense Insurance
will terminate:

A. When the maximum amount is paid per disability


B. When the maximum amount is paid per lifetime limit
C. When the employee has been transferred to a branch in another
country for 2 months
D. All of the above

(C2 / S3.13(a) & C6 / S2.5)


27. Basic Medical Expense is similar to Dread Disease in that:

A. It covers 30 major illnesses


B. It has a cash value
C. It does not cover Pre-existing illnesses
D. It has a Coordination of Benefits clause

(C8 / S2.2.2)
28. Which of the following is TRUE about MediShield being extended
automatically to eligible Singaporeans and Singapore Permanent
Residents?

A. If their births are registered after 1 December 2007


B. If they are registered at national schools as at 1 May 2011, 1 May
2012, 1 May 2013 or 1 May 2014
C. If they get married in Singapore
D. All of the above

AXA Life Singapore Pte Ltd 7


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

(C7 / S5 / Figure 7.4)


29. Arrange the following MHC plans in terms of Cost Control from the lowest
to the highest:

I. POS
II. Group Model HMO
III. Network Model HMO
IV. IPA

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

(C8 / S3.1)
30. The purpose of Eldershield is to:

A. provide long-term care protection to elderly Singaporeans in the event


of severe disabilities
B. provide nursing care to elderly Singaporeans in their old age
C. provide for hospital expenses in the event of dread diseases
D. provide subsidies to families of elderly Singaporeans who require
institutional care

(C2 / S3.5.1)
31. Mrs Lim has bought a Medical Expense Insurance with a deductible of
$10,000 for 1st June 2001 to 31st May 2002. On 1st Sept 2001, she
encountered an accident and the total claimable medical expenses were
$3,000. In March 2002, she went for surgery to remove her womb and the
medical costs were $8,000. How much can Mrs Lim claim, given that a
per-disability/per year deductible applies?

A. $11,000
B. $8,000
C. $1,000
D. $0

AXA Life Singapore Pte Ltd 8


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

(C15 / S2.1)
32. Mr Lim has recently bought Dread Disease Insurance. He is concerned
about Mrs Lim, who is a housewife, his son who is now 2 years old. He
hopes to support the child till age 25. Given that his family’s monthly
expenses amount to $3,000, with existing inflation rate of 2% and
investment return of 5%, how much would Mrs Lim require in the event
that Mr Lim is not around?

A. $1,063,440
B. $ 666,960
C. $591,970
D. $19,440

(C4 / S6.2(b))
33. Mr Tan, who is an accountant, used to earn $4,000 per month before he
was disabled. After partial recovery from his disability, he found a suitable
job as a clerk, which pays him $1,500 per month. What would Mr Tan’s
disability income benefit if the disability benefit is $3,000 per month?

A. $3,000 per month


B. $2,500 per month
C. $1,875 per month
D. $4,000 per month

(C2 / S3.5)
34. Which is the most suitable type of expense participation in the Medical
Expense Insurance to recommend to a client who has financial constraint?

A. with deductible
B. with co-insurance
C. both deductible and co-insurance
D. no deductible and co-insurance

(C7 / S3.2)
35. Which of the following is NOT a cost-control measure for Health Managed
Organisations?

A. Risk-sharing management
B. Utilization management
C. Fee-for-provider
D. Nurturing and promoting a healthy nation

AXA Life Singapore Pte Ltd 9


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

(C4 / S8.2.1)
36. An insured is covered under a Disability Income policy. Three years later,
he decides to change to a more risky occupation and informs the
insurance company. The underwriter is likely to:

A. Exclude any claim arising as a result of his new occupation


B. Increase the monthly benefit payments without increasing the
premiums
C. Not change any of the policy terms as it is for more than 2 years old
and is guaranteed renewable
D. Terminate the policy immediately

(C2 / S2.2.4)
37. John suffered from a stroke recently and is bedridden at home. His family
engaged a part-time nurse to take care of him. If John is covered under a
range of policies, which one should he claim from?

A. Managed Healthcare Insurance


B. Long Term Care
C. Major Medical Expense Policy
D. Medical Expense Insurance with Private Nursing Health Care Benefit

(C6 / S2.2)
38. A Dread Disease Policy provides coverage that is:

A. World-wide
B. Whole Life
C. Available in Singapore and West Malaysia only
D. Reduced by the payment of other similar insurance plans

(C6 / S2.3.1)
39. You are proposing a 50% Acceleration Critical Illness Policy to your client for his
wife who is a homemaker. In this case, you should also propose to attach a

A. Waiver of Premium Rider to the policy


B. Disability Income Insurance Rider to the policy
C. Critical Illness Waiver of Premium Rider to the policy
D. Total and Permanent Disability Benefit Rider to the policy

(C9 / S5.7.1)
40. A cancelable policy grants the insurer the right to terminate the policy

A. At any time, For any reason


B. At any time, Simply by notifying the policy-owner in writing
C. For any reason, Simply by notifying the policy-owner in writing
D. At any time, For any reason, Simply by notifying the policy-owner in writing

AXA Life Singapore Pte Ltd 10


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

(C11 / S3.4.9)
41. Which of the following characteristics of group insurance is important to the
underwriter in determining the “feel” of future claim experience?

A) Minimal underwriting requirement, as employee only need to complete a


health declaration form.
B) Experience-rating, as it is usually underwritten based on past claims
experience.
C) Cost effective, as it provides low cost protection
D) Plan is renewable by the employer on a yearly basis.

(C11 / S3.4.6)
42. Which of the following best describes voluntary group insurance policies?

A. Employers are not expected to pay part of the premium.


B. Higher costs due to less admin work and greater pooling effect of risk due to
full participation.
C. Employees have no control over the plan.
D. Generates interest and appreciation from employees.

(C3 / S4.1)
43. Which of the following describes Portable Medical Benefit Scheme (PMBS)?

A. It rides on Medisave/ Medishield framework, as employees makes an


additional monthly contribution to his medisave account to buy medical
insurance
B. Employees are medically insured even though he may be unemployed or is in
between jobs.
C. To be eligible for the tax deduction, the scheme must cover more than 20% of
all local employees recruited after 1/4/2004.
D. For part- time employees, the monthly medisave contribution should be
based on 1% of their actual salary.

(C3 / S4.2.3)
44. Which of the following expenses do not qualify under Transferable Medical
Insurance Scheme (TMIS) special benefits?

A) Daily room and board charges


B) Charges for miscellaneous hospital services
C) Charges for in patient and outpatient surgery
D) Pre and Post hospitalization expenses.

(C3 / S4.2.4)
45. To be eligible for the TMIS benefits, an employee must be:-

A. Below age 55
B. Working on a permanent employment contract or a temporary one with a
term of 12 months or more.
C. Working full time with the same employer.
D. Either a Singaporean or a foreigner.

AXA Life Singapore Pte Ltd 11


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

(C12 / S4.1.2(b)(ii))
46. Switching from one A&H Policy to another is detrimental if:-

A. Client suffers no termination penalty


B. Replacement policy is more sophisticated
C. Replacement policy has the same level of benefit at a higher cost
D. Replacement policy has a lower level of benefit at same cost

(C12 / S4.1.2(b)(ii))
47. Advisory Process Requirement does not apply to the following:-

A. Eldershield
B. Telemarketing policies
C. Direct marketing policies
D. Hospitalization plan

(C12 / S4.4)
48. Which of the following is considered an offence and liable to a fine not exceeding
$25,000 or imprisonment for a term not exceeding 12 months or both?

A. Failure to comply with the “Know Your Client” requirements


B. Failure to have a reasonable basis for providing advice
C. Failure to use marketing materials approved by the intermediary
D. Failure to provide and explain the benefit illustration or product summary to
the insured.

(C12 / S5)
49. Which of the following constitutes the Best Practice Standards set out under
MAS Notice 120?

A. Jargon should be avoided in order not to mislead clients.


B. Information provided should be presented in plain language, easy for the
insured and insurer to understand.
C. Information provided must be sufficient to help the insured makes a right
decision.
D. Opinions must be unambiguously stated that it is a statement of opinion.

(C12 / S2)
50. MAS Notice120 covers A&H policies and life polices with A&H benefits. The latter
refers to benefits paid out under the following situation:

A) In the event of an injury or disability as a result of accident of or sickness.


B) In the event if the insured is found to have a disease.
C) In the event of liability arising from travel insurance
D) In the event of damages from motor insurance

AXA Life Singapore Pte Ltd 12


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

Mock Exam 4 Answers

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

Q3. Yearly Expenditure = $5,000 X 12 = $60,000


No. of years = 25 – 2 = 23
Net Interest = 5% – 2% = 3%
Maintenance Cost = $60,000 X 16.4436 (Table A2, i=3%, Year=23)
= $986,616

Q7. Total claimable amount = $200 + $600 = $800


Total benefit payables = $800 - $500 = $300

Q32. Yearly Expenditure = $3,000 X 12 = $36,000


No. of years = 25 – 2 = 23
Net Interest = 5% – 2% = 3%
Maintenance Cost = $36,000 X 16.4436 (Table A2, i=3%, Year=23)
= $591,970

Q33. Pre-Disability Earning – Present Earnings


-------------------------------------------------- X Total Disability Benefit
Pre-Disability Earnings
= ($4,000 - $1,500) X $3,000
$4,000
= $1,875

AXA Life Singapore Pte Ltd 13


For Internal Use Only. Based on 4th Edition Text (June 2010)

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