IC27 Mock Test Sample 4
Health insurance and personal accident policies generally fall under non-life insurance. The presence of a third party (healthcare provider) increases complexity due to decision-making on services and costs. Concepts like claims, ombudsman, and fraud (hard and soft) are important in claim settlement. Reinsurance (like excess of loss) helps insurers manage high risks. Behavioral concepts such as moral hazard (demand and supply side) influence overuse of services. In India, high out-of-pocket expenses and rising healthcare costs drive demand for insurance. Health insurance mainly covers hospitalization and provides financial protection, while cashless systems reduce the need for immediate funds during medical emergencies.
1. Prakash has a health insurance policy and also a personal accident policy. These products fall into which section(s)?
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
2. Why does involvement of a third party make health insurance complex?
A) Only statement 1 is correct
B) Only statement 2 is correct
C) Only statement 3 is correct
D) Statement 1 and 3 are correct, 2 is incorrect
3. Under a Stop Loss treaty, limit and retention are expressed as a percentage of ______.
A) Gross premium income
B) Gross profit margin
C) Net premium income
D) Gross net retained premium income
4. Mr. X has a dispute of ₹1.3 crore. Where should he go?
A) National commission
B) State commission
C) District forum
D) Ombudsman
5. What is the process where insured demands the admissible amount from insurer?
A) Maturity
B) Premium
C) Cover
D) Claim
6. Who set up the office of the ombudsman?
A) Insurance Brokers
B) IRDA
C) Central Government
D) State Government
7. Staging an accident deliberately for claim is what type of fraud?
A) Hard fraud
B) Soft fraud
C) Internal fraud
D) External fraud
8. Which statement is true for excess of loss reinsurance?
A) Insurer pays when claim ratio increases
B) It benefits ceding company beyond retention
C) Reinsurer pays when claim ratio matches level
D) It indemnifies losses above retention
9. Mahesh opting for expensive treatment due to insurance is called?
A) Moral hazard
B) Premium adjustment
C) Adverse selection
D) Risk pooling
10. Doctors recommending unnecessary tests due to insurance is called?
A) Premium adjustment
B) Risk pooling
C) Adverse selection
D) Supply-side moral hazard
11. Why did Mahesh choose expensive tests and hospitalization?
A) Not aware of insurance
B) Wanted quick recovery
C) Tests were necessary
D) Wanted to use insurance
12. Using more health services due to insurance is called?
A) Risk pooling
B) Adverse selection
C) Premium adjustment
D) Demand-side moral hazard
13. What role did insurance play in Mahesh choosing a better room?
A) Prioritized health over finance
B) Made him cautious
C) Avoided treatment
D) Opted for more expensive room
14. What % of health expenditure in India is out-of-pocket?
A) 2.2%
B) 71%
C) 3.4%
D) 20%
15. What is the main focus of health insurance in India?
A) Dental care
B) Vision care
C) Hospitalization
D) Preventive care
16. What % of population is covered by commercial health insurance (excluding schemes)?
A) 1%
B) 5%
C) 20%
D) 50%
17. Why do people opt for health insurance in India?
A) To make profit
B) To reduce tax
C) Free healthcare
D) Cover major illness financial burden
18. Why is health insurance important?
A) Make providers affordable
B) Promote pharmaceuticals
C) Encourage hospitalization
D) Provide financial access and save savings
19. Main reason for rising healthcare cost?
A) Lack of facilities
B) Low demand
C) Rising pharma costs
D) Inefficient hospitals
20. Main advantage of cashless hospitalization?
A) Need more liquidity
B) Arrange large funds
C) No need for large cash upfront
D) Eliminates insurance
