Chapter 8: Healthcare Products

Question 1

Name 2 types of cover HC products can provide

Answer 1

1. Indemnity, e.g., for loss of income.

2. Lump sum

Question 2

Explain the factors to consider in underwriting (4)

Answer 2

1. Age
2. Weight
3. Gender
4. Existing health confiditions

Question 3

Name the types of underwriting in HC (5)

Answer 3

1. Medical underwriting (age, weight, existing medical conditions)
2. Moratorium underwriting (No cover for conditions that exist prior to a specified period)
3. Medical history disregard
4. No worse terms (cover at least as comprehensive as current cover + no underwriting)
5. Continued existing medical exclusions

Question 4

Name 4 providers of HC

Answer 4

1. State
2. Subsidised HC through donor organisation
3. Mutuals (HC schemes in SA)
4. Insurance companies

Question 5

Name the 7 types of HC products

Answer 5

1. Private medical insurance: Indemnity basis, extent depends on the level of state provides. Usually exposed to fraud and moral hazards
2. Loong-term Care: Continued personal care / nursing care when someone cannot look after themselves without some degree of assistance (pre-funded or immediate)
3. Critical illness (Lump sum but can be regular income when suffering a pre-agreed upon condition). Usually buy out a partner or pay for medical expenses

Cash benefits
4. Major medical expenses: Lump sum when policyholder undergoes surgery (in-patient + recuperation cost)

5. Hospital plans: Cover expenses for being in hospital
6. Medical shortfall (Gap cover): Pay difference between procedure and PMI payment
7. Personal Accident: Provides lump sum due to bodily injury from accident