R05 PMI exclusions, underwriting and claims: free practice questions
5 free questions on PMI exclusions, underwriting and claims, part of learning outcome 9 (Other insurance policies). Pick an answer to check it, or open the answer to see why each option is right or wrong.
Question 1 of 5
What is the effect of choosing a higher excess on a PMI policy?
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The answer is D: The premium is lower
With an excess, the insured pays the first part of treatment costs or of a year's claims. A higher excess lowers the insurer's risk and so reduces the premium.
Why the other options are wrong
A
The excess doesn't affect the moratorium.
B
The excess doesn't change which conditions are covered.
C
A higher excess lowers the premium rather than raising it.
Question 2 of 5
Why are chronic, incurable illnesses generally excluded from PMI?
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The answer is B: PMI is designed for curable acute conditions, and chronic care costs are open-ended
PMI focuses on acute conditions where quick private treatment is effective. Ongoing management of incurable conditions could be unlimited in cost, and long-term care insurance may be more relevant.
Why the other options are wrong
A
Chronic conditions aren't always treated abroad.
C
The FCA doesn't prohibit cover for chronic illness.
D
Personal accident policies don't cover chronic illness.
Question 3 of 5
Why are group PMI premiums usually lower than individual premiums?
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The answer is D: Lower processing costs and the bargaining power of a large group
Group pricing reflects lower administration costs per member and the negotiating power of large groups. Larger groups may also get reduced or no underwriting.
Why the other options are wrong
A
Group schemes do cover hospital treatment.
B
Insurance premium tax still applies to group premiums.
C
Group members needn't be under 30.
Question 4 of 5
Vera wants to switch PMI providers to save money. She is being treated for a condition covered by her current policy. What is the key risk?
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The answer is B: The new insurer may exclude it as pre-existing, for a time or for good
A condition covered by the current policy is likely to be treated as pre-existing by a new insurer, so it may not be covered for some time, or at all. Some insurers offer reduced underwriting for switchers.
Why the other options are wrong
A
Cost isn't the key risk; the danger is losing cover for a condition she's being treated for.
C
Changing PMI provider has no effect on her NHS entitlement.
D
Past claims aren't refunded to the old insurer when she switches.
Question 5 of 5
How are PMI claim payments usually made and taxed for an individual policy?
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The answer is C: Paid directly to the hospital or doctor, and tax-free
PMI claims are usually paid directly to the hospital or doctor. Claim payments are tax-free, and there is no tax relief on individual premiums.
Why the other options are wrong
A
Payments don't go to the GP as a referral fee.
B
Claims aren't paid to the patient as taxable income.
D
Claims don't go through HMRC.
Practise all 17 PMI exclusions, underwriting and claims questions
These are 5 of the 17 questions on this topic in R0 Exam Prep, and the full R05 bank covers every learning outcome. Practise free, track your weak areas and sit timed mocks.
R0 Exam Prep is an independent revision tool. It is not produced, endorsed by or affiliated with the Chartered Insurance Institute (CII). Questions and explanations are original. Use it alongside the official study text. About R0 Exam Prep