100+ Free IAI SP1 Practice Questions

Prepare for the IAI Subject SP1 Health and Care Specialist Principles exam with instant access — no signup required.

✓ No registration✓ No credit card✓ No hidden fees✓ Start practicing immediately

100+ Questions

100% Free

Loading practice questions...

Same family resources

Explore More Institute of Actuaries of India Exams

Continue into nearby exams from the same family. Each card keeps practice questions, study guides, flashcards, videos, and articles in one place.

IAI Subject CM2 — Financial Engineering and Loss Reserving (Institute of Actuaries of India)

Practice Questions100 questions

IAI Subject CP1 — Actuarial Practice (Institute of Actuaries of India)

Practice Questions100 questions

2026 Statistics

Key Facts: IAI SP1 Exam

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 Exam

IAI Subject SP1 Health and Care Specialist Principles develops the principles of actuarial planning and control for health and care business, covering products such as private medical insurance, critical illness, income protection and long-term care, plus pricing, underwriting, reserving, capital, reinsurance and risk management for the India jurisdiction.

Assessment

Online written application paper answered in Microsoft Word, with questions of varying marks across the syllabus

Time Limit

3 hours 15 minutes

Passing Score

Pass or fail decided by the IAI Board of Examiners each sitting; no fixed percentage is published

Exam Fee

Specialist Principles per-paper fee set by IAI each session; check the IAI exam-fees page (Institute of Actuaries of India (IAI))

IAI SP1 Exam Content Outline

15%

Health and care products and general business environment

Understand critical illness, income protection, long-term care, private medical insurance, cash plans and group covers, plus distribution channels, regulation, taxation and the role of the State in health and care provision.

25%

Product design and specific features

Apply actuarial principles to the design of health and care products, balance the interests of different stakeholders, allow for options and guarantees, and compare the relative merits of alternative designs.

30%

Risks and risk management

Assess sources of risk such as data, claim rates and amounts, persistency, anti-selection, concentration and catastrophe, and manage them through reinsurance, underwriting, claims management and asset-liability matching.

15%

Models and valuation

Use deterministic, stochastic, formula, cashflow and multi-state models for pricing and decision-making, and determine supervisory reserves, solvency capital requirements and embedded value.

15%

Monitoring experience and setting assumptions

Set pricing, reserving and embedded-value assumptions, explain why reserving assumptions may differ from pricing, and undertake experience monitoring within the actuarial control cycle.

How to Pass the IAI SP1 Exam

What You Need to Know

Passing score: Pass or fail decided by the IAI Board of Examiners each sitting; no fixed percentage is published
Assessment: Online written application paper answered in Microsoft Word, with questions of varying marks across the syllabus
Time limit: 3 hours 15 minutes
Exam fee: Specialist Principles per-paper fee set by IAI each session; check the IAI exam-fees page

Keys to Passing

Work through all 100 available questions
Review every answer and explanation
Track weak areas and revisit them
Use our AI tutor for tough concepts

IAI SP1 Study Tips from Top Performers

1Learn each health and care product (PMI, critical illness, income protection, long-term care, cash plans) by its benefit form, key risks and design levers, because SP1 questions test how features respond to a given situation.

2Practise explaining why reserving assumptions are more prudent than pricing assumptions and how reserve strength interacts with solvency capital, a recurring SP1 theme.

3Master the risk-management toolkit (reinsurance types, underwriting, claims management, asset-liability matching) and be able to match each technique to the specific risk it controls.

4Use the actuarial control cycle as a framework: design, model, set assumptions, monitor experience, and feed findings back into pricing, reserving and risk management.

5Because the real paper is written application, time your practice answers and structure them with clear, reasoned points rather than just recalling definitions.

Frequently Asked Questions

How many questions are on IAI SP1?

SP1 is a written application paper with several questions of varying marks rather than a fixed number, so IAI does not publish a set question count. Our free bank provides 100 multiple-choice questions as knowledge preparation across the SP1 syllabus.

How long is the IAI SP1 exam?

The SP1 paper runs for 3 hours 15 minutes and is taken online, with answers typed in Microsoft Word. It tests the ability to apply health and care actuarial principles to scenarios rather than to recall facts.

What is the passing score for IAI SP1?

IAI's Board of Examiners sets the pass mark for each sitting and reports a pass-or-fail result, so there is no single published percentage. Candidates should aim to demonstrate sound application across all five syllabus topics.

Which topics matter most on SP1?

Risks and risk management is the largest topic at 30% of the syllabus, followed by product design at 25%. Products and environment, models and valuation, and monitoring and assumptions each account for 15%.

Is IAI SP1 the same as IFoA SP1?

IAI SP1 mirrors the IFoA SP1 Health and Care syllabus, applied to the Indian regulatory, tax and market context. SP1 replaced the former Subject ST1 under the 2019 curriculum.

How is this practice bank structured?

Although the real SP1 exam is a written application paper, this free bank uses 100 multiple-choice questions weighted to the official topic split so you can drill the underlying health and care principles efficiently.