Insurance Principles Quiz

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Questions and Answers

This is an example of _________________ fraud.

Impersonation

Under which of the following conditions is domiciliary hospitalization covered in a health insurance policy? (Select all that apply)

The condition of the patient is such that he/she can be removed to the Hospital/Nursing Home, but prefer not to

Duration of hospitalization is exceeding 24 hours

The patient cannot be removed to Hospital/Nursing Home for lack of accommodation therein (correct)

The treatment can be carried out only in Hospital/Nursing Home

Which of the following codes captures the procedures performed to treat the illness?

CPT (correct)

PCT

DCI

ICD

Which of the following is an example of moral hazard? (Select all that apply)

A person drinking copious amounts of alcohol because he is insured Signup and view all the answers

Why is heredity history of importance in medical underwriting?

Certain diseases can be passed on from parents to children Signup and view all the answers

A payment made under a money policy upon reaching a milestone will be classified under which type of claim?

Maturity Claim Signup and view all the answers

Generally insurance companies do not hold the premium in case of fraud or misrepresentation. However, due to which of the following circumstances can the insurer retain the premium of the policyholder?

Fraudulent claim Signup and view all the answers

What is meant by a claim under insurance policy?

Any demand made by the policyholder on the insurer. Signup and view all the answers

After how many years is any missing person presumed to be dead?

5 Years Signup and view all the answers

Under which type of policy is the claim payment made in the form of periodic payments?

Money back policy Signup and view all the answers

Given below is a list of policies. Identify under which type of policy the claim payment is made in the form of periodic payments?

Money-back policy Signup and view all the answers

Mahesh has bought a life insurance policy with a critical illness rider. Who will the payment be made to if he suffers a heart attack?

Karan Signup and view all the answers

Praveen died in a car accident. Which additional document is required to be submitted in case of accidental death?

Inquest Report. Signup and view all the answers

Which of the below death claims will be treated as an early death claim?

If the insured dies within three years of policy duration Signup and view all the answers

Given below are some events that will trigger survival claims. Identify which of the below statements is incorrect?

Claim paid on maturity of a term insurance policy Signup and view all the answers

A payment made under a money-back policy upon reaching a milestone will be classified under which type of claim?

Periodical survival claim Signup and view all the answers

Shankar bought a 10 year Unit Linked Insurance Plan. If he dies before the maturity of the policy, what will be paid?

Higher of sum assured or fund value Signup and view all the answers

Based on classification of claims (early or non-early), pick the odd one out?

Pravin dies after five and half years of buying a term insurance plan Signup and view all the answers

Which of the following statements is not an underwriting decision?

Claim rejection Signup and view all the answers

Which of the following factors does not influence an underwriter's decision?

Spouse's History Signup and view all the answers

Cardiovascular disease refers to diseases which affect?

Heart and circulatory system (Blood) Signup and view all the answers

Insurance is based on the concept of?

Risk Signup and view all the answers

Important factors for health insurance underwriting are?

All of the above Signup and view all the answers

Underwriting is the process of?

Risk selection and risk pricing Signup and view all the answers

The principle of utmost good faith in underwriting must be followed by?

Both insurer and insured Signup and view all the answers

Group insurance is underwritten mainly on the?

Group Signup and view all the answers

Study Notes

Moral Hazard and Claims

Moral hazard refers to behavior that changes when a person is insulated from risk, leading to risky actions like excess alcohol consumption.
Life insurance claims can include death, maturity, survival benefits, and surrender claims based on circumstances and policy terms.
Death claims for accidental causes require additional documentation, such as an inquest report.
Claims are settled or disputed within 30 days from submission of all required documents and clarifications as per IRDA regulations.

Medical Underwriting and Insurance Policies

Hereditary history is crucial in medical underwriting because certain diseases can be inherited from parents.
A 'money-back policy' pays claims in the form of periodic payments rather than a lump sum.
Critical illness riders allow policy benefits to be assigned to another party after an event like a heart attack.

Insurance Types and Provisions

Different policies determine claim payments; Unit Linked Insurance Plans (ULIPs) may pay the higher of the sum assured or fund value upon death.
Renewal notices are obligatively sent at least 30 days before policy expiry.
The Premium Payment under Section 64 VB of the Insurance Act should be paid before the insurance cover begins.

Health Insurance Nuances

Cashless services in health insurance mean that the insured does not pay upfront; instead, the insurer settles costs directly with the hospital.
Daily hospitalization cash benefits pay a fixed amount each day regardless of actual treatment costs incurred.

Regulatory Framework and Health Schemes

Employees' State Insurance Scheme (ESIC) covers workers earning up to ₹15,000; contributions come from employees, employers, and state governments.
Insurance brokers, third-party administrators (TPAs), and health insurance schemes must follow guidelines, and claims should be processed efficiently (within specified durations).

Miscellaneous Concepts in Insurance

Portability in health insurance allows individuals to transfer pre-existing conditions when switching insurers without losing coverage.
Claims may be nullified due to non-disclosure, fraud, or misrepresentation by the insured.
The classification of healthcare levels includes primary, secondary, and tertiary care, impacting the types of services provided and the physicians involved.

Key Definitions

Morbidity: Health-related risks covered by health insurance.
Premium: The amount paid to the insurer for coverage.
Inpatient: A patient receiving treatment in a hospital.
Third Party Administrator (TPA): Facilitator providing services between insurers and hospitals without selling insurance directly.### Health Insurance Concepts
Health insurance is grounded in the concept of risk.
Underwriting evaluates various factors such as age, gender, and habits, to determine risk categories.
Underwriting involves risk selection and risk pricing as a fundamental process.

Underwriting Purpose and Principles

The primary purpose of underwriting is to prevent anti-selection and classify risks to ensure fairness.
Utmost good faith and insurable interest are two essential principles guiding underwriting.

Insurance Guidelines and Portability

Insurers must adhere to FILE & USE guidelines when introducing, modifying, or withdrawing products.
Portability in health insurance can be opted during renewal.

Group Insurance Insights

Group insurance is based on the law of averages and is underwritten on a group basis rather than individually.
Common types of groups offered group health insurance include employer-employee groups, labour unions, and professional associations.
Government-sponsored group health insurance examples include RSBY and Yeshaswini.

Individual Insurance Factors

The primary factor for personal accident insurance coverage is an individual’s occupation.
Individuals working in high-risk categories such as high voltage electricity fall under Risk Group III (High).

Claims Process and Requirements

Insurers maintain a set of documents such as personal details, physical conditions, and habits in the proposal form.
The underwriting process is complete when all medical examinations are finalized and the policy is issued based on risk assessment.
Permanent Total Disability claims require specific documentation, including a disability certificate.

Medical Underwriting Considerations

Medical underwriting involves evaluating the applicant's current health status and age to assess risk.
The principle of indemnity ensures that insured parties are only compensated for actual losses incurred, not exceeding the sum insured.

Fraud and Claims Investigation

Moral hazard involves taking insurance solely to claim benefits, while impersonation fraud occurs when someone other than the insured seeks treatment.
Domiciliary hospitalization covers situations where patients cannot be admitted to a hospital due to lack of accommodation.

Stakeholders and Claims Process

The insurance company shareholders, regulators, and TPAs are key stakeholders in the insurance claim process, excluding the Human Resource Department.
In case of a claim denial, options include reapplying to the insurer or pursuing legal channels.

Health Insurance Documentation

Medical and treatment processes are recorded in case papers during hospitalization.
Claims provisioning reflects the insurer's status and anticipation of claims based on various evaluations.

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Description

Test your knowledge on key insurance principles, including moral hazard and the significance of heredity in medical underwriting. This quiz covers various scenarios and their implications in the insurance field. See how well you understand these crucial concepts!