IC27 Mock Test Sample 4
This set of IC27 Health Insurance questions covers important concepts such as classification of insurance products under life and non-life segments, claim processes, and dispute resolution through forums and Ombudsman. It explains reinsurance types like stop loss and excess of loss, along with fraud types such as hard fraud. Behavioral concepts like moral hazard (demand and supply side) are highlighted through real-life examples. The questions also emphasize India’s healthcare scenario, including high out-of-pocket expenses, rising medical costs, and low insurance penetration. Additionally, it explains the importance of health insurance in providing financial protection and the benefits of cashless hospitalization systems.
1. Prakash has a health insurance policy and also a personal accident policy. What main section(s) of the insurance market do these products normally fall into?
a) Life insurance in both cases
b) Non-life insurance in both cases
c) Non-life insurance for health and life insurance for personal accident
d) Life insurance for health and non-life insurance for personal accident
e) Life insurance for health and non-life insurance for personal accident or life insurance in both cases
2. When a third party is involved in health insurance it makes the process complex. Why?
- The third party decides the type of health services used
- The insured decides how much services are used
- The insurer decides the cost of services
a) Only statement 1 is correct
b) Only statement 2 is correct
c) Only statement 3 is correct
d) Statements 1 and 3 are correct, 2 is incorrect
e) Statements 1 and 2 are correct, 3 is incorrect
3. Under a Stop Loss treaty, the limit and retention are generally expressed as a percentage of ______.
a) Gross premium income
b) Gross profit margin
c) Net premium income
d) Gross net retained premium income
e) Gross net written premium income
4. Mr. X has a dispute regarding his claim of Rs 1.3 crore. He should approach the ______.
a) National commission
b) State commission
c) District forum
d) Ombudsman
e) Consumer Forum
5. What is the process called in which the insured demands the admissible insured amount from the insurance company?
a) Maturity
b) Premium
c) Cover
d) Claim
e) Payout
6. Who set up the office of the Ombudsman?
a) Insurance Brokers
b) IRDA
c) Central Government
d) State Government
e) Insurance company
7. What type of fraud is a deliberate attempt to stage an accident requiring hospitalization?
a) Hard fraud
b) Soft fraud
c) Internal fraud
d) External fraud
e) Other fraud
8. Which of these is true with respect to excess of loss reinsurance?
a) Claim ratio exceeds a level and insurer bears risk
b) Positive for ceding company for losses beyond retention
c) Reinsurer pays when claim ratio matches a level
d) Indemnifies ceding company for loss above retention
e) Reinsurer bears risk when claim ratio exceeds level
9. What term describes Mahesh opting for expensive treatment due to insurance?
a) Moral hazard
b) Premium adjustment
c) Adverse selection
d) Risk pooling
e) Underwriting
10. What is the term when doctors recommend unnecessary treatments due to insurance?
a) Premium adjustment
b) Risk pooling
c) Adverse selection
d) Supply-side moral hazard
e) Demand-side moral hazard
11. Why did Mahesh choose expensive tests and hospitalization?
a) He was not aware of insurance
b) He wanted to recover quickly
c) Tests were necessary
d) He wanted to use insurance
e) He wanted to avoid treatment
12. What term describes insured individuals using more services due to insurance?
a) Risk pooling
b) Adverse selection
c) Premium adjustment
d) Underwriting
e) Demand-side moral hazard
13. What role did insurance play in Mahesh choosing a costly room?
a) Prioritized health over finances
b) Made him cautious
c) Made him avoid treatment
d) Made him choose expensive options
e) No impact
14. What percentage of health expenditure in India is out-of-pocket?
a) 2.2%
b) 71%
c) 3.4%
d) 20%
e) 50%
15. What is the primary focus of health insurance products in India?
a) Dental care
b) Vision care
c) Hospitalization coverage
d) Preventive care
e) Wellness programs
16. What percentage of population is covered by commercial health insurance (excluding schemes)?
a) 1%
b) 5%
c) 20%
d) 50%
e) 100%
17. Why do individuals opt for health insurance in India?
a) To make profit
b) To reduce tax
c) To get free healthcare
d) To cover major illness financial burden
e) To invest savings
18. Why is health insurance important?
a) Make providers affordable
b) Promote pharmaceuticals
c) Encourage hospitalization
d) Provide financial access and protect savings
e) Invest in healthcare
19. What is the primary reason for rising healthcare costs?
a) Lack of facilities
b) Low demand
c) Rising cost of pharmaceuticals
d) Poor hospital management
e) Decreasing diseases
20. What is the main advantage of cashless hospitalization?
a) Need more liquidity
b) Requires large upfront payment
c) Reduces need for immediate funds
d) Eliminates insurance need
e) Reduces awareness
