CMFAS HI – Health Insurance Module Exam

Correct: The insurer pays the CI rider sum assured upon diagnosis and the full basic sum assured upon the subsequent death is the right answer because, under an Additional Benefit Critical Illness (CI) rider, the payment of the CI benefit does not reduce or affect the basic sum assured of the underlying policy.

Incorrect: The suggestion that the rider reduces the basic policy sum assured is wrong because that describes the mechanism of an Acceleration Benefit, not an Additional Benefit. The claim that the basic policy is immediately terminated upon a CI claim is incorrect as Additional Benefit riders allow the basic policy to remain in force. Stating that the rider serves as a pre-payment of death benefits is a characteristic of Acceleration CI covers, whereas Additional Benefits provide a separate, extra layer of coverage.

Takeaway: Additional Benefit CI riders provide independent coverage that does not reduce the basic policy’s sum assured or terminate the contract upon a claim, allowing for a total payout that exceeds the basic sum assured.

Correct: Statement I is correct because the source text explicitly states that a referral from the attending physician of the hospital where the insured person received inpatient treatment is usually required for community hospital stays. Statement II is correct because hospital miscellaneous expenses are defined to include laboratory services, X-ray examinations, surgical dressings, and ambulance services.

Incorrect: Statement III is incorrect because the short-stay ward benefit is typically limited to a period of observation and treatment of up to 24 hours, not 48 hours. Statement IV is incorrect because inpatient psychiatric treatment specifically excludes coverage for conditions resulting from drug addiction or the abuse of alcohol.

Takeaway: Medical expense insurance defines specific eligibility conditions for inpatient benefits, such as referral requirements for community hospitals and strict exclusions for substance abuse in psychiatric care. Therefore, statements I and II are correct.

Correct: Statement II is correct because multiple-pay CI plans allow for more than one claim, with total payouts potentially reaching 200% of the sum assured if different conditions occur. Statement III is correct because while CI underwriting is similar to Life Insurance, the non-medical limit is lower, meaning medical tests are required at lower coverage amounts.

Incorrect: Statement I is incorrect because severity-based CI plans provide progressive payments that are subject to a monetary cap and only pay up to the total sum assured. Statement IV is incorrect because the waiting period for second and subsequent claims in a multiple-pay CI plan is usually waived by the insurer.

Takeaway: Severity-based plans offer early-stage payouts within the sum assured limit, while multiple-pay plans provide broader coverage that can exceed the original sum assured for multiple diagnoses. Therefore, statements II and III are correct.

Correct: Providing a Product Summary and a Benefit Illustration is the right answer because MAS Notice 120 specifically mandates these disclosures to ensure clients receive clear information on benefits, exclusions, and costs before a contract is concluded.

Incorrect: Providing an annual financial report is wrong because MAS 120 focuses on product-level disclosures rather than the insurer’s corporate financial standing. The mention of a written guarantee for level premiums is incorrect because many health products have non-guaranteed premiums that are subject to adjustment by the insurer. The requirement for a comparison table of three competitors is wrong because MAS 120 does not prescribe a specific multi-company price comparison as a mandatory disclosure document.

Takeaway: MAS Notice 120 requires the provision of standardized documents like the Product Summary to help clients make informed decisions regarding accident and health insurance.

Correct: Statement I is correct because MAS Notice 120 requires that a Product Summary be provided to clients to ensure they understand the key features, benefits, and exclusions of the health insurance product. Statement II is correct because when a replacement of an existing accident and health policy is recommended, the representative must provide a written comparison to highlight the differences and potential disadvantages. Statement III is correct because representatives are specifically required to explain the implications of switching policies, such as the potential loss of coverage for pre-existing conditions or the start of a new waiting period.

Incorrect: Statement IV is incorrect because the disclosure and advisory requirements of MAS Notice 120 apply to all accident and health insurance products, regardless of whether they contain a savings, investment, or cash-value component.

Takeaway: MAS Notice 120 mandates rigorous disclosure and comparison processes for accident and health insurance to ensure clients are fully informed of product features and the risks associated with policy replacement. Therefore, statements I, II and III are correct.

Correct: Statement I is correct because Hospital Cash Insurance pays a fixed daily amount chosen at inception, which has no direct correlation to actual medical fees. Statement II is correct because payment is limited to a specified number of days per hospitalisation, such as 180 days. Statement IV is correct because the policy terminates once the maximum lifetime limit of hospitalisation days is reached.

Incorrect: Statement III is incorrect because the policy pays a fixed daily benefit rather than reimbursing actual medical expenses; thus, the payout may be more or less than the costs incurred.

Takeaway: Hospital Cash Insurance provides a fixed daily benefit independent of actual costs, subject to specific per-event and lifetime duration limits. Therefore, statements I, II and IV are correct.

Correct: Statement I is correct because MAS Notice 120 mandates that the “Your Guide to Health Insurance” booklet must be provided to help consumers understand the basics of health insurance. Statement III is correct because the notice requires intermediaries to disclose all material information, including waiting periods and significant exclusions, to ensure the client understands the scope of coverage. Statement IV is correct because for Integrated Shield Plans, representatives must provide a Fact Sheet that compares the private plan with MediShield Life to ensure the client understands the additional benefits and costs.

Incorrect: Statement II is incorrect because MAS Notice 120 generally requires a Benefit Illustration for many accident and health products (such as long-term care or disability income) to demonstrate projected costs and benefits; it is not universally optional for all products.

Takeaway: MAS Notice 120 ensures consumer protection by requiring standardized disclosure documents, such as the Fact Sheet for Integrated Shield Plans and the general health insurance guide. Therefore, statements I, III and IV are correct.

Correct: Providing a fixed daily amount that is not affected by other insurance payments is the correct feature of Hospital Cash Insurance. According to the regulations, the benefit payment is independent of and paid on top of any other health insurance policies, plans, or schemes, including MediShield Life and Integrated Shield Plans.

Incorrect: The suggestion that the policy pays a reimbursement for the remaining balance is incorrect because Hospital Cash Insurance is a fixed-benefit product, not an indemnity-based plan. The claim that the benefit is reduced if the bill is fully covered is wrong because the payout is not affected by the status of the hospital bill or other insurance. The idea of coordinating benefits to ensure they do not exceed the actual cost is incorrect as this policy pays a pre-determined daily rate regardless of the actual expenses incurred.

Takeaway: Hospital Cash Insurance provides a fixed daily benefit that is paid in addition to any other medical insurance reimbursements the insured may receive.

Correct: Statement II is correct because Hospital Cash Insurance is usually not underwritten due to its small premiums, leading to the permanent exclusion of pre-existing medical conditions. Statement III is correct because the insurer reserves the right to request additional documentary evidence, such as an Attending Physician’s Report, beyond the standard claim form and bills.

Incorrect: Statement I is incorrect because a rider cannot stand on its own and its term cannot be longer than the basic policy; it expires at a specified age or upon policy maturity, whichever is earlier. Statement IV is incorrect because the coverage for Hospital Cash Insurance is normally provided on a 24-hour, worldwide basis rather than being restricted to Singapore.

Takeaway: Hospital Cash Insurance riders are limited by the duration of the main policy and typically exclude pre-existing conditions due to simplified or non-existent underwriting processes. Therefore, statements II and III are correct.

Correct: Furnishing the booklet to the prospective client at or before the time a recommendation is made is the right answer because MAS Notice 120 requires representatives to provide ‘Your Guide to Health Insurance’ to ensure clients are adequately informed during the advisory process.

Incorrect: The suggestion to deliver the booklet only after the application is submitted is wrong because the disclosure must happen before the client commits to the purchase. The idea that the booklet is only provided upon request is incorrect as this is a mandatory regulatory requirement for all prospective clients. Sending the booklet after the policy has been issued is wrong because it defeats the purpose of pre-purchase education and fails to comply with the timing requirements of the Notice.

Takeaway: Financial representatives must provide the mandatory ‘Your Guide to Health Insurance’ booklet to clients at or before the point of recommendation to facilitate informed decision-making.

Correct: The requirement for the insured person to be hospitalized overseas for more than five days is the standard trigger for the hospital visit benefit. This coverage reimburses reasonable travel and accommodation expenses for one relative or friend to visit and stay with the insured until they are medically fit to return home, subject to a specified limit such as S$10,000.

Incorrect: The requirement for admission to an Intensive Care Unit is incorrect because the hospital visit benefit applies to general hospitalization, whereas ICU status is usually associated with double hospital cash benefits. The condition regarding being unfit to travel for at least two weeks is wrong because the policy trigger is specifically based on the duration of the hospital stay (usually five days), not a two-week certification. The suggestion that medical expense limits must be fully utilized is incorrect as the hospital visit benefit is an independent reimbursement category that does not depend on other limits being exhausted.

Takeaway: Travel insurance provides specific coverage for a relative or friend to visit an insured person hospitalized abroad, provided the hospitalization exceeds a minimum duration, typically five days.

Correct: Providing the booklet to the prospective client at the point of recommendation or before the client signs the application form is a mandatory requirement under MAS Notice 120. This ensures that the consumer is equipped with essential information about health insurance concepts and the Singapore healthcare system before making a financial commitment.

Incorrect: The suggestion that the booklet is only provided upon specific request is incorrect because MAS Notice 120 mandates proactive disclosure for all accident and health insurance products. The claim that the booklet is provided fourteen days after policy issuance is wrong because the disclosure must occur during the advisory stage, not after the contract is finalized. The requirement for an online declaration before premium payment is incorrect as the regulation focuses on the timely provision of the physical or digital guide before the application is signed.

Takeaway: Financial advisers must provide the ‘Your Guide to Health Insurance’ booklet to prospects before they sign an application form to ensure informed decision-making.

Correct: Statement II is correct because, unlike many other forms of health insurance, pre-existing dental conditions are typically covered under group dental insurance plans. Statement IV is correct because most insurers provide the flexibility to extend dental coverage to include the insured employee’s family members, specifically their spouse and children.

Incorrect: Statement I is incorrect because Group Dental Care Insurance is most commonly issued as a rider attached to a Group Hospital and Surgical Insurance policy rather than a standalone contract. Statement III is incorrect because the policy typically provides coverage on a 24-hour, worldwide basis, rather than being restricted to treatments within Singapore.

Takeaway: Group Dental Care Insurance is a flexible employee benefit usually provided as a rider that includes coverage for pre-existing conditions and offers worldwide protection. Therefore, statements II and IV are correct.

Correct: The employee commences full-time military or police service, except during peacetime reservist training is the right answer because Group Dental Care Insurance policies specifically state that coverage terminates automatically when an employee enters full-time military, naval, air, or police service, with a specific carve-out for peacetime National Service reservist duty.

Incorrect: The diagnosis of a critical illness is wrong because being diagnosed with a condition from the industry list of 37 critical illnesses does not trigger the termination of dental insurance coverage. Utilizing the maximum annual benefit limit is wrong because reaching a reimbursement cap for the year does not end the underlying insurance contract or the employee’s eligibility. Seeking treatment from a dentist who is not part of the insurer’s panel is wrong because the policy allows for non-panel visits through a reimbursement process rather than terminating the cover.

Takeaway: Coverage under a Group Dental Care Insurance policy automatically terminates upon specific triggers, including the termination of full-time employment, policy expiration, or entry into full-time military or police service.

Correct: Providing the guide before the client signs the application form is the right answer because MAS Notice 120 mandates that representatives must provide the ‘Your Guide to Health Insurance’ booklet to prospective clients at the point of sale to ensure they understand basic health insurance concepts before committing to a purchase.

Incorrect: The suggestion to provide the guide only after the insurer accepts the application is wrong because disclosure must happen during the advisory process, not after the contract is formed. The option regarding seven business days after policy issuance is incorrect as it confuses the disclosure timeline with administrative delivery or free-look periods. The claim that it should be provided at the point of first premium payment is wrong because the signature on the application form is the regulatory deadline for this specific disclosure.

Takeaway: Under MAS Notice 120, financial advisers must provide the ‘Your Guide to Health Insurance’ booklet to clients before they sign any application form for an accident and health insurance product.

Correct: The representative must provide the guide to the prospective policyholder at or before the time of recommendation because MAS Notice 120 mandates this disclosure to ensure clients are educated on the health insurance landscape before making a purchase decision.

Incorrect: Delivering the guide only with the final policy document is incorrect as the regulation requires the client to be informed during the advisory process, not after the contract is already in force. Stating the guide is only required upon a specific request for MediShield Life information is wrong because the requirement is a mandatory part of the standard disclosure process for A&H products. Claiming the guide must be signed and submitted for underwriting is incorrect as the guide is an educational resource for the consumer rather than a formal underwriting or contractual document.

Takeaway: Under MAS Notice 120, the ‘Your Guide to Health Insurance’ must be provided to clients at or before the point of recommendation to facilitate informed decision-making.

Correct: The payment of a fixed monthly amount for each enrolled member regardless of the actual volume of medical services provided is the definition of capitation. This method transfers financial risk to the provider, as they receive the same fee whether a member requires extensive treatment or no treatment at all during the period.

Incorrect: The description of reimbursement for each specific service rendered at a rate lower than standard billing refers to discounted-fee-for-service, which is volume-based. The payment of a pre-negotiated maximum amount for each specific procedure according to a master list describes a fee schedule. The mention of a fixed annual compensation for an employee describes a salary-based model, which is distinct from the per-member-per-month structure of capitation.

Takeaway: Capitation is a managed healthcare payment method that provides a fixed, per-head fee to providers, incentivizing cost-effective care by decoupling provider income from the volume of services.

Correct: Under MAS Notice 120, the Product Highlights Sheet (PHS) is designed to provide consumers with a clear, concise, and easy-to-understand summary of the key features, risks, and benefits of the specific accident and health product being recommended. This ensures that the most critical information is not lost within the more voluminous Product Summary or Policy Document.

Incorrect: The option regarding market-wide premium comparisons is incorrect because the PHS is a product-specific disclosure document rather than a comparative market survey. The statement that the PHS is a legally binding contract that overrides the policy is wrong, as the policy contract remains the definitive legal agreement between the insurer and the insured. The suggestion that the PHS documents the financial needs analysis is incorrect, as that process is recorded in the representative’s recommendation report or fact-find document.

Takeaway: MAS 120 requires the Product Highlights Sheet to facilitate consumer understanding by highlighting essential product information in a standardized format.

Correct: Reimbursing the costs up to a maximum limit of S$320.00 is the right answer because the Schedule of Allowances specifically lists S$320.00 as the claim limit for a ‘Completely bony impaction’ when performed by a non-panel dentist.

Incorrect: The statement that the insurer will pay the full amount regardless of cost is wrong because ‘as charged’ coverage is only applicable if the insured visits a dentist within the approved panel. The claim that coverage only applies to government hospitals is incorrect as the policy distinguishes between panel and non-panel status rather than the type of medical facility. The suggestion of a 50% reimbursement is wrong because the policy utilizes fixed dollar caps for non-panel claims instead of a percentage-based coinsurance system.

Takeaway: In group dental insurance, visiting a panel dentist typically results in full coverage, whereas visiting a non-panel dentist subjects the claim to specific dollar limits defined in the schedule of allowances.

Correct: Statement I is correct because MAS Notice 120 requires a Product Summary to ensure the client understands the policy’s main features and exclusions. Statement II is correct because a Benefit Illustration is mandatory for A&H products with non-guaranteed components to show potential policy values. Statement III is correct because the notice mandates a fact-finding process to ensure any recommendation made is suitable for the client’s specific needs and circumstances.

Incorrect: Statement IV is incorrect because MAS Notice 120 mandates the provision of written disclosure documents to the client; a verbal summary is insufficient and does not fulfill the regulatory requirement to provide the physical Product Summary.

Takeaway: MAS Notice 120 establishes a structured disclosure and advisory framework, requiring written product information and a thorough fact-finding process to protect consumers. Therefore, statements I, II and III are correct.

Correct: Statement I is correct because stem cell transplant coverage is limited to the surgery itself, explicitly excluding incidental costs like harvesting, storage, and transport. Statement III is correct because living donor organ transplant benefits apply only if the recipient is a family member and the condition was diagnosed after a 24-month waiting period.

Incorrect: Statement II is incorrect because the policy specifically states that pre- and post-hospital treatments are not covered for emergency overseas inpatient treatment. Statement IV is incorrect because the required timeframe for receiving accident inpatient dental treatment is 14 days, not 30 days.

Takeaway: Medical expense policies often include specific exclusions for incidental transplant costs and strict timeframes or relationship requirements for specialized benefits like dental and organ donation. Therefore, statements I and III are correct.

Correct: Statement I is correct because MAS Notice 120 mandates that representatives provide the “Your Guide to Health Insurance” booklet to clients to ensure they understand the basic principles of health coverage. Statement II is correct as the notice requires the disclosure of all fees, charges, and any commissions or benefits received by the adviser to maintain transparency. Statement III is correct because the representative must obtain a written acknowledgment from the client confirming that they have received and understood the Product Summary and Benefit Illustration.

Incorrect: Statement IV is incorrect because MAS Notice 120 does not require insurers or representatives to guarantee that premiums will remain level; in fact, premiums for many accident and health products, such as Integrated Shield Plans, are generally not guaranteed and can be adjusted by the insurer.

Takeaway: MAS Notice 120 establishes a mandatory disclosure framework to ensure clients receive standardized information and understand the costs and benefits of health insurance products before purchase. Therefore, statements I, II and III are correct.

Correct: The Staff Model HMO is the right answer because physicians are employees of the HMO and receive fixed salaries. Since their compensation is not tied to the volume of services rendered, they lack the financial incentive to over-treat patients or order unnecessary diagnostic tests.

Incorrect: The Fee Schedule method is wrong because, by capping the reimbursement for each procedure, it may actually encourage physicians to provide more services or follow-up visits to compensate for lower per-service income. The Independent Practitioners Association model is incorrect as it involves contracting with external private practices that often operate under different incentive structures. The Preferred Provider Organization model is wrong because it is a less restrictive plan type that typically uses fee-for-service arrangements, which do not inherently discourage the provision of extra services.

Takeaway: By employing physicians on a salary basis, Staff Model HMOs eliminate the financial motivation for over-treatment that is often present in fee-for-service or capped reimbursement systems.

Correct: Statement I is correct because the PCP acts as a “gatekeeper,” coordinating all aspects of a member’s care and providing necessary referrals for specialist treatment within the network. Statement III is correct because MHCOs leverage their ability to direct a high volume of patients to specific providers to negotiate lower, contracted fees.

Incorrect: Statement II is incorrect because under the capitation method, the provider is paid the same fixed amount regardless of how often the member receives medical attention or the actual cost of that care. Statement IV is incorrect because in a Staff Model HMO, physicians are compensated with a fixed salary based on average local earnings rather than a discounted-fee-for-service arrangement.

Takeaway: Managed Healthcare (MHC) contains costs by using Primary Care Physicians as gatekeepers and implementing payment structures like capitation and salaries to manage provider incentives. Therefore, statements I and III are correct.

Correct: Statement I is correct because MAS Notice 120 requires representatives to provide the ‘Your Guide to Health Insurance’ booklet to help clients understand health insurance basics before they sign an application. Statement II is correct as a Product Summary is a mandatory disclosure document that outlines the key features, benefits, and exclusions of the specific Accident & Health policy being recommended. Statement IV is correct because representatives are specifically required to warn clients that pre-existing conditions may not be covered under the new policy, ensuring the client understands the risks of switching or starting new coverage.

Incorrect: Statement III is incorrect because the obligation to provide mandatory product disclosures, such as the Product Summary and the Health Insurance Guide, remains mandatory even if a client chooses not to undergo a full financial needs analysis or fact-find process.

Takeaway: MAS Notice 120 mandates specific disclosures and the provision of educational materials to ensure clients are well-informed about health insurance products, regardless of whether they opt for a full advisory service. Therefore, statements I, II and IV are correct.

Correct: Statement I is correct because needs selling is a systematic approach that prioritizes identifying a client’s financial gaps before any product is recommended. Statement II is correct because product selling is characterized by an emphasis on the technical features and benefits of a specific plan rather than the client’s personal objectives. Statement III is correct because fact-finding is the essential data-gathering phase used to identify and quantify the client’s specific insurance requirements.

Incorrect: Statement IV is incorrect because the financial needs analysis is not a one-time event. According to the syllabus, the process includes periodic client reviews to ensure that the insurance coverage remains appropriate as the client’s life stages, financial situation, and health needs evolve over time.

Takeaway: A professional financial needs analysis relies on a client-centric needs-selling approach supported by thorough fact-finding and ongoing periodic reviews to maintain suitability. Therefore, statements I, II and III are correct.

Correct: Statement II is correct because, as specified in the Group Model HMO description, physicians only see patients who have signed up for the HMO that contracted them, ensuring high effectiveness in managing costs. Statement IV is correct because Mixed Model HMOs are defined as a combination of two or more traditional HMO types, which allows for broader consumer choice and expanded clinical capacity.

Incorrect: Statement I is incorrect because the Network Model HMO actually has less tight control over Utilisation Management compared to Staff or Group models, as physicians may treat non-HMO patients and the HMO manages hospital arrangements. Statement III is incorrect because a key feature of a Preferred Provider Organisation (PPO) is that members do not need to select a Primary Care Physician (PCP) or obtain referrals to see other providers in the network.

Takeaway: Managed healthcare models vary in their level of provider restriction and cost control, with HMOs generally requiring more coordination through PCPs while PPOs offer more flexibility for higher out-of-pocket costs. Therefore, statements II and IV are correct.

Correct: Statement II is correct because Figure 7.4 illustrates that POS plans offer a higher degree of provider choice compared to all HMO models, including the Staff Model. Statement III is correct because Section 4.22 states that members who choose to go out of the network for care will pay higher co-payments and/or deductibles. Statement IV is correct because Section 5.2 explicitly identifies the Staff Model HMO as having the greatest degree of cost control among managed healthcare plans.

Incorrect: Statement I is incorrect because Section 4.23 explains that the “point-of-service” feature allows a member to go outside the network on their own without needing a referral from their Primary Care Physician (PCP).

Takeaway: A Point-of-Service (POS) plan provides a hybrid approach that allows members to access out-of-network care without a referral, though such choices result in higher out-of-pocket expenses. Therefore, statements II, III and IV are correct.

Correct: Statement I is correct because sexually transmitted diseases and AIDS-related complex are standard exclusions under MHC Insurance policies. Statement III is correct because the claims procedure for in-network care is handled directly between the MHCO and providers, removing the filing burden from the member. Statement IV is correct because out-of-network claims specifically require the submission of the claimant’s statement and the original itemized medical bill as supporting documentation.

Incorrect: Statement II is incorrect because MHC Insurance policies typically provide an exception for cosmetic surgery when the treatment is necessitated by an accident, making the claim that it is always excluded inaccurate.

Takeaway: MHC Insurance policies contain specific exclusions for lifestyle or non-essential treatments and simplify the claims process for in-network care while requiring specific documentation for out-of-network services. Therefore, statements I, III and IV are correct.

Correct: Prioritizing the client’s unique circumstances and providing a service through a structured advisory process is the hallmark of needs selling. According to the syllabus, this approach focuses on discovering the client’s needs and advising on the most suitable product rather than just pushing a specific plan.

Incorrect: The statement about assuming the client requires the plan describes product selling, where the advisor moves straight to the product without proper discovery. The statement about creating a sense of urgency to ensure immediate action relates to the pressure-to-buy characteristic of product selling, which can lead to client resistance. The statement about building a relationship based on product features is also a trait of product selling, whereas needs selling focuses on the client’s situation to build long-term trust.

Takeaway: Needs selling is a service-oriented approach that focuses on uncovering a client’s specific situation and providing solutions through a proper advisory process, rather than assuming needs or applying sales pressure.