H04 Health Insurance Underwriting MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on H04 Health Insurance Underwriting, a fundamental topic in the field of IC38 Life Insurance Agent Exam. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our H04 Health Insurance Underwriting MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of H04 Health Insurance Underwriting mcq questions that explore various aspects of H04 Health Insurance Underwriting problems. Each MCQ is crafted to challenge your understanding of H04 Health Insurance Underwriting principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC38 Life Insurance Agent Exam tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our H04 Health Insurance Underwriting MCQs are your pathway to success in mastering this essential IC38 Life Insurance Agent Exam topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of H04 Health Insurance Underwriting. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your H04 Health Insurance Underwriting knowledge to the test? Let's get started with our carefully curated MCQs!

H04 Health Insurance Underwriting MCQs | Page 2 of 7

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Q11.
What aspect of an insured's behavior is referred to as the moral hazard in health insurance?

a.

Gender-specific health risks

b.

Genetic factors affecting diseases

c.

Deliberate intention to take insurance just to collect a claim

d.

Occupation-related hazards

Discuss
Answer: (c).Deliberate intention to take insurance just to collect a claim Explanation:Moral hazard in health insurance refers to the deliberate intention of taking insurance just to collect a claim, which can prove costly to the insurance company.
Q12.
Underwriting is the process of ___________.

a.

Marketing insurance products

b.

Collecting premiums from customers

c.

Risk assessment and risk pricing

d.

Selling various insurance products

Discuss
Answer: (c).Risk assessment and risk pricing Explanation:Underwriting is the process of "risk assessment and risk pricing." It involves evaluating the risk associated with insuring a person or entity and determining the terms on which insurance coverage will be granted, including the premium, conditions, and coverage details. Underwriting is a critical aspect of insurance to ensure that insurers can make a reasonable profit while effectively managing risk.
Q13.
What are the two main purposes of underwriting in the context of health insurance?

a.

Selling insurance products and processing claims

b.

Assessing risk and marketing insurance products

c.

Preventing anti-selection and classifying risks

d.

Issuing policies and collecting premiums

Discuss
Answer: (c).Preventing anti-selection and classifying risks Explanation:The two main purposes of underwriting in health insurance are to prevent anti-selection (selection against the insurer) and to classify risks, ensuring equity among risks.
Q14.
What is anti-selection in the insurance context?

a.

The process of evaluating risks

b.

The tendency of high-risk individuals to seek insurance eagerly

c.

Assessing the degree of risk for each proposal

d.

The standardization of premiums

Discuss
Answer: (b).The tendency of high-risk individuals to seek insurance eagerly Explanation:Anti-selection, also known as adverse selection, is the tendency of individuals who suspect or know that their chance of experiencing a loss is high to seek out insurance eagerly. This can result in losses for the insurer.
Q15.
What is the term for individuals whose expected morbidity (chance of falling ill) is average?

a.

Standard risks

b.

Preferred risks

c.

Substandard risks

d.

Declined risks

Discuss
Answer: (a).Standard risks Explanation:Individuals with an average expected morbidity are categorized as "standard risks" in underwriting.
Q16.
Who are considered "preferred risks" in underwriting?

a.

Individuals with high chances of falling ill

b.

Individuals with low chances of falling ill

c.

Individuals with average chances of falling ill

d.

Individuals who are declined for insurance

Discuss
Answer: (b).Individuals with low chances of falling ill Explanation:"Preferred risks" in underwriting are individuals with significantly lower chances of falling ill, making them less risky to insure and eligible for lower premiums.
Q17.
What are "substandard risks" in the context of underwriting?

a.

Risks that are uninsurable

b.

Risks with an average chance of falling ill

c.

Risks with a higher chance of falling ill than average

d.

Risks with the lowest chances of falling ill

Discuss
Answer: (c).Risks with a higher chance of falling ill than average Explanation:"Substandard risks" are risks with a higher chance of falling ill than average. They may be insurable, but insurers may charge higher premiums or impose certain conditions and restrictions.
Q18.
What is the term for individuals who are highly prone to sickness and making claims, making them difficult to insure even at higher premium rates?

a.

Standard risks

b.

Preferred risks

c.

Substandard risks

d.

Declined risks

Discuss
Answer: (d).Declined risks Explanation:"Declined risks" are individuals who have certain conditions that make them highly prone to sicknesses and likely to cause a disproportionate degree of liability on the common pool, making it difficult to insure them even at higher premium rates.
Q19.
What does the term "Moral Hazard" refer to in the context of insurance?

a.

Ethical issues in the insurance industry

b.

Risks associated with an insurance policy

c.

The deliberate intention of taking insurance just to collect a claim

d.

The moral values of policyholders

Discuss
Answer: (c).The deliberate intention of taking insurance just to collect a claim Explanation:"Moral Hazard" in insurance refers to the deliberate intention of taking insurance with the knowledge of an impending claim, typically without disclosing it to the insurer.
Q20.
What does it mean when an individual is classified as a "Declined Risk" in underwriting?

a.

They have the lowest chances of falling ill

b.

They have average chances of falling ill

c.

They are highly prone to sickness and likely to cause losses

d.

They are preferred risks with low morbidity

Discuss
Answer: (c).They are highly prone to sickness and likely to cause losses Explanation:A "Declined Risk" in underwriting is an individual who is highly prone to sickness and likely to cause losses to the insurer, making it difficult to insure them even at higher premium rates.
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