CMFAS Health Insurance (HI) Exam Free Trial Set Two

I & III.
Hospital Cash Insurance can also be issued as a rider attached to a basic policy, such as a Life Insurance policy (e.g. Whole Life Insurance, Endowment Insurance or Critical Illness Insurance policy). The rider usually expires when the insured reaches a specified age (e.g. 65, 70 or 75 years) or on the maturity of the policy, whichever is the earlier. Thus, the term of this rider cannot be longer than that of the basic policy, since the rider cannot stand on its own.

I, II & III.
The common exclusions of a Hospital Cash Insurance policy include:
– pre-existing medical condition that the insured knew existed or has received treatment and/or medical advice;
– pre-existing physical defect or infirmity, unless declared to and accepted by the insurer;
– sexually transmitted disease;
– illegal or unlawful act of the insured;
– self-inflicted injuries or suicide, while sane or insane.

Citizens, SPRs, and foreigners in Singapore are charged differently for public healthcare services. Citizens enjoy heavy subsidies in Class B2 and C wards.
SPRs receive a significant subsidy, while foreigners are not subsidized at all. The subsidy level distinction reflects the privileges of citizenship, and to further sharpen the distinction between citizens and SPRs. Refer to Appendix 2C for the Table of Subsidy Level.

The main source of underwriting information for individual Medical Expense Insurance is the proposal form. For group coverage, the employer is required to complete a Group Insurance Fact-Finding (GIFF) Form which is the main source of information for the underwriting assessment. For small groups (e.g. below 10 members/employees), the underwriter may also require the individual employee to complete a health declaration form.

In the TMIS: The employer purchases the policy, while in the PMBS: The employer makes an additional contribution to the Employee’s Medisave Account for him to purchase the policy on his own.

▪ provide an IP for at least 20% of the local employees as at the first day of the financial year being assessed, and all local employees who commence their employment during that financial year; and
▪ pay IP premiums on behalf of the employees directly to the approved insurer, or reimburse the premiums into the respective employees’ Medisave Accounts.

The Ministry of Health (MOH) has put together a “Healthcare 2020” Masterplan
to improve healthcare services for Singaporeans. It focuses on three strategic
objectives, namely enhancing accessibility, quality, and affordability of
healthcare for Singaporeans.

various initiatives, such as providing more opportunities for flexible, part-time work in the community through its “Place and Train” Programme in the aged care sector, as well as implementing a new remuneration framework for senior public sector doctors, to better recognizing doctors for their diverse roles in clinical care, education, research, and administration.

▪ to avoid the possibility of a policy owner receiving reimbursement twice for
the same charges, or making a profit from his insurance;
▪ to make the premium more affordable;
▪ to define more clearly the necessary medical care and treatment; and
▪ to avoid the policy owner selecting against the insurer

The purpose of this Clause is to ensure that the total claims made by the policy owner cannot exceed the total actual medical expenses incurred.

A Critical Illness (also known as Dread Disease) policy is an insurance product designed to provide a lump sum benefit to a policyholder in the event that the insured is diagnosed to be suffering from one of the critical illnesses or has undergone a surgical procedure covered under the policy.

Critical Illness (CI) Insurance policy can be sold as a stand-alone policy.

CI Insurance policies or riders could cover only a maximum of 30 out of the 37 severe critical illnesses in accordance with a list of standardised common definitions of critical illnesses as specified jointly by the Life Insurance Association of Singapore (LIA) and the General Insurance Association of Singapore (GIA).

Eligibility Criteria For Payment Of Critical Illness Benefit
The common eligibility criteria are highlighted below:
(a) The policy must be in force.
(b) The life insured has not reached the expiry age of the CI Insurance cover.
(c) Critical Illness Must Be One That Is Covered.
(d) Meets The Definition Of Critical Illness.

TMIS policy is an enhancement of the existing employer-sponsored Group Medical Expense Insurance outside of the CPF Medisave framework. It is basically an employer-sponsored Group Medical Insurance programme with the following two additional features:
▪ continuation of coverage; and
▪ transferability of benefits.

All pre/post hospitalisation outpatient, emergency outpatient accident and outpatient kidney dialysis/cancer treatment expenses are not eligible for TMIS benefits, even if they can be reimbursed under the TMIS plan.

The different underwriting tools for individual employees are:
Proposal form (also called Application form) plus:
▪ computerised payslip
▪ certified letter from company
▪ Notice of Assessment
▪ Central Provident Fund (CPF) Statement (six months) and large amount questionnaire if the annual benefit is more than a certain amount
▪ medical test report based on the age and amount of disability benefit proposed.

The different underwriting tools for self-employed person includes the proposal form with:
▪ Notice of Assessment for the last three years; or
▪ audited company’s accounts for the last three years; and large amount questionnaire if the annual benefit is more than a certain amount (e.g. S$60,000); and
▪ medical test report (e.g. medical examination report, etc.) based on the age and amount of disability benefit proposed.

The actual features of the LTC Insurance will depend on the product design as described below:
(a) The product may be offered on a stand-alone basis, or it can be attached as a rider to a plan, such as a Whole Life Insurance policy.
(b) There is usually a minimum entry age imposed as determined by the insurer. The maximum entry age is usually in the range of 70 to 75 years next birthday.
(c) The product is usually issued on a guaranteed renewable basis.
(d) There is no cash or paid-up value (with the exception of ElderShield which has a paid-up value) at any time.
(e) The policy is non-participating and does not share in the divisible surplus of the insurer.
(f) The premiums are level throughout the term of the policy and are based on the entry age level.
g) The policy expires or terminates if the premiums remain unpaid after the grace period, or if the maximum benefit limit is reached.
(h) If the insured recovers from his disability, payments will stop.

The common exclusions of an LTC Insurance policy include:
(a) all pre-existing conditions, unless fully declared by the insured at the time of application and accepted by the insurer;
(b) self-inflicted injury;
(c) mental or nervous disorders without demonstrable organic disease;
(d) alcoholism or drug abuse;
(e) Acquired Immune Deficiency Syndrome (AIDS) or infection by any human immunodeficiency virus (HIV), except where the infection is due to blood transfusion or resulting from infection incurred by medical staff after the issue date;
(f) war, or any act of war, or service in any of the armed forces or auxiliary units; and
(g) participation in a felony, riot or insurrection.

Individual Insurance
Eligibility
-Only the individual who applies for the coverage is covered.

-An individual needs only to be insurable, in order to be granted the coverage.

Group Insurance
Eligibility
-Only members who belong to the group and are actively at work are covered.

-Members under a group must satisfy the eligibility requirements as stated in the Group Insurance policy, before they are granted the coverage

Group Insurance
– Only members who belong to the group and are actively at work are covered.
– Members under a group must satisfy the eligibility requirements as stated in the Group Insurance policy, before they are granted the coverage
– Only one master contract is issued to the employer or an affiliated organisation. The number of insured members is more than one.
– Insured members may or may not have the right to decide on the amount of coverage that they want. In the employer-paid plans/compulsory plans, the amount of coverage is determined by the employer.
– Group as a whole is evaluated depending on the gender and age distribution of the group, occupation mix and past claims experience.

In the event of a claim, the disability benefit payable will be reduced by the following sources of income:
▪ payments from other insurance policies against disability (except the Total and Permanent Disability Benefit under Life Insurance policies), including Work Injury Compensation Insurance; and

▪ any continuing salary, commission or other incomes derived from the insured’s occupation or business in which he was engaged immediately prior to his disability.

The features of a typical Disability Income Insurance policy are described below:
(a) It can be issued as a stand-alone (for which then, no rider is possible) policy, or as a rider to a basic Life Insurance plan.
(b) It provides a regular monthly income during the insured’s total and partial disablement.
(c) The premiums are waived during the benefit period.
(d) The benefits may be level, or may increase at a given rate.
(e) There is a choice of deferred/elimination period.
(f) There is a choice of benefit period.

It must be medically appropriate and safe to move him to another location or to return him to Singapore for treatment. The evacuation method may include air ambulance, surface ambulance, regular air transportation, railroad or any other appropriate means.

Medical Expense Insurance can be offered as a rider or a stand-alone policy. If issued as a rider, it is often attached to a permanent Life Insurance policy. Note that it is not common in Singapore for Medical Expense Insurance to be offered as a rider.

Advantages Of A Voluntary (Contributory) Plan
Employees
▪ It gives the participating employees some control over the Group Insurance plan.
▪ They can obtain coverage at a lower premium rate than buying it individually.

Risk-pooling via insurance schemes:
▪ National basic health insurance scheme – MediShield Life;
▪ Private health insurance for additional coverage – Medisave-approved Integrated Shield Plans (IPs); and
▪ Severe old age disability insurance – ElderShield and ElderShield Supplements.

Advances in medical sciences, the greater use of expensive medical technology and drugs, as well as an ageing population with longer life expectancy, are some reasons that contribute to rising healthcare costs.

Singapore’s healthcare system is designed to ensure that everyone has access to different levels of healthcare in a timely, cost-effective and seamless manner. Healthcare services are accessible through a wide network of primary, acute and intermediate and long-term care (ILTC) providers.

Specific Disease Insurance provides for a lump sum payment (e.g. S$50,000) in the event that the insured person is diagnosed to be suffering from the specific disease (e.g. cancer) covered by the policy.

In Singapore, in order for insurers to keep medical claims costs low, especially in private hospitals, daily hospital cash is often packaged in Medical Expense Insurance and payable only upon hospital or ward downgrade. This is to encourage the insured person to stay in a public hospital, or a ward that is lower than his covered plan.