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IAI Subject SP1 Health and Care Specialist Principles practice questions are available now; exam metadata is being verified.
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When pricing group PMI for an employer, the use of the scheme's own past claims experience ('experience rating') is more appropriate when:
A
B
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D
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2026 Statistics
Key Facts: IAI SP1 Exam
5
Syllabus Topics
SP1 2024 syllabus
30%
Largest Topic (Risk Mgmt)
SP1 syllabus weights
3h 15m
Exam Duration
IAI exam format
Word
Written Paper Format
IAI online exam
200 hrs
Typical Study Time
SP subject guidance
100
Practice Questions
OpenExamPrep
IAI Subject SP1 (Health and Care) is a Specialist Principles subject that mirrors the IFoA SP1 syllabus applied to India. It is assessed by a single online written application paper of 3 hours 15 minutes answered in Microsoft Word, not multiple choice, so IAI does not publish a fixed question count and reports results as pass or fail rather than a percentage. The 2024 syllabus weights the five topics as products and environment 15%, product design 25%, risks and risk management 30%, models and valuation 15%, and monitoring and assumptions 15%. This free set offers 100 explanation-driven MCQs as knowledge preparation across that body of knowledge.
Sample IAI SP1 Practice Questions
Try these sample questions to test your IAI SP1 exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.
1Which feature most clearly distinguishes a standalone critical illness (CI) policy from an income protection (IP) policy?
A.CI pays a lump sum on diagnosis of a defined condition, while IP pays a regular income during incapacity for work
B.CI pays a regular income while IP pays a single lump sum
C.CI covers only accidental injury whereas IP covers only sickness
D.CI is always written as a group contract while IP is always individual
Explanation: Critical illness insurance pays a tax-free lump sum once the policyholder is diagnosed with one of the listed conditions (e.g. cancer, heart attack, stroke) and survives any survival period. Income protection instead replaces a proportion of earnings as a regular benefit while the insured is unable to work through illness or injury.
2Private medical insurance (PMI) typically indemnifies the policyholder against which of the following?
A.A fixed daily cash amount irrespective of the actual treatment cost
B.The cost of acute private medical treatment, subject to policy limits and exclusions
C.Loss of earnings during a period of hospitalisation
D.A lump sum payable only on diagnosis of a terminal illness
Explanation: PMI is an indemnity product that meets the cost of eligible acute private medical treatment, subject to the policy's benefit limits, excesses and exclusions (such as chronic and pre-existing conditions). It reimburses actual costs rather than paying a fixed benefit.
3Long-term care insurance (LTCI) is primarily designed to meet the cost of which need?
A.Acute surgical treatment in a private hospital
B.Replacement income for a wage earner aged under 50
C.Care and assistance arising from an inability to perform activities of daily living
D.A maturity benefit payable on survival to a fixed age
Explanation: LTCI provides benefits to fund personal and nursing care when an individual can no longer perform a defined number of activities of daily living (such as washing, dressing, feeding, mobility) or fails a cognitive test. It targets the long-duration care needs that typically arise in older age.
4A health cash plan is best described as a contract that:
A.Indemnifies the full cost of major surgery
B.Provides a single large lump sum on diagnosis of cancer
C.Replaces 75% of salary during long-term sickness
D.Pays fixed cash amounts towards routine everyday health costs such as dental, optical and physiotherapy expenses
Explanation: Health cash plans pay set cash amounts (often up to annual limits per benefit category) towards routine and predictable health expenses like dental check-ups, glasses and physiotherapy. They are low-cost, high-frequency products rather than catastrophe cover.
5In an individual income protection policy, the 'deferred period' refers to:
A.The continuous period of incapacity that must elapse before benefit payments begin
B.The waiting period after policy issue before any claim is admissible
C.The maximum length of time benefits will be paid
D.The period during which premiums may be deferred without lapsing the policy
Explanation: The deferred (elimination) period is the time the claimant must be continuously incapacitated before the income benefit starts to be paid. A longer deferred period reduces the claim cost and hence the premium, and helps the cover dovetail with employer sick pay.
6Why do income protection policies commonly cap the benefit at a proportion (for example 50-65%) of pre-disability earnings rather than 100%?
A.Because regulation forbids paying more than 65% of salary
B.To preserve a financial incentive for the claimant to return to work and reduce moral hazard
C.Because reinsurers will not cover benefits above 65%
D.Because the deferred period mathematically limits benefits to 65%
Explanation: Replacing only part of net earnings keeps a financial gap so that returning to work is more attractive than remaining on claim, mitigating moral hazard and over-insurance. It also allows for the fact that benefits may be tax-free whereas earnings were taxed.
7Which of the following is a typical advantage of an 'accelerated' critical illness benefit attached to a life policy compared with a standalone CI policy?
A.It pays both the CI sum and the death sum in full, doubling the cover
B.It removes the need for any underwriting at outset
C.The same sum assured is paid on the earlier of critical illness or death, avoiding the need for two separate claims
D.It guarantees premiums can never be reviewed
Explanation: Accelerated CI pays the sum assured on the earlier of a qualifying critical illness or death; the same single benefit is brought forward if illness occurs first, after which the life cover ceases. This is cheaper than full additional CI because only one payout is ever made.
8A key reason group health and care schemes can often be offered with limited or no individual medical underwriting is that:
A.Group members are legally barred from making claims in the first year
B.Group benefits are always smaller than individual benefits
C.Employers indemnify the insurer against all claims
D.The group provides a naturally diversified, actively-at-work membership that reduces anti-selection
Explanation: An employer scheme covers a body of employees joining for employment reasons rather than because they expect to claim, and an 'actively at work' condition screens out those currently unable to work. This diversification and reduced anti-selection allows free-cover limits with little or no individual underwriting.
9Which statement about the role of the State in health and care provision is most accurate from an insurer's perspective?
A.The extent and quality of State provision strongly influences demand for private health and care insurance
B.State provision has no effect on private insurance demand
C.Private insurers must replicate State benefits exactly
D.State provision always fully removes the need for private cover
Explanation: Where State healthcare is comprehensive and well-funded, private demand is typically lower or focused on speed and choice; where it is limited, private cover fills larger gaps. Insurers must design products around the level, funding and reliability of State provision in the jurisdiction.
10Which of the following is generally considered a distribution channel for individual health and care insurance?
A.The reinsurance treaty department
B.Independent financial advisers and insurance brokers
C.The statutory solvency regulator
D.The external auditor's actuarial review team
Explanation: Health and care products reach individual customers through channels such as IFAs and brokers, tied agents, direct marketing, bancassurance and digital/online platforms. Each channel differs in cost, advice level, persistency and the mix of business it generates.
About the IAI SP1 Practice Questions
Verified exam format metadata for IAI Subject SP1 Health and Care Specialist Principles is pending. The practice questions above remain available while official exam length, timing, passing score, fee, and administrator details are reviewed.