QFA Life Assurance Sample Paper 1
Study Guide with All Solved Solutions
2026-2027 Edition.
A need to accumulate a capital sum from regular surplus income over a period of time is which
type of personal financial need?
A Savings
B Investment
C Protection
D Loan - Answer A
1.1 - Main types of personal financial needs
The primary financial need of a client in their 60s is likely to be:
A savings
B investment
C protection
D loans - Answer B
1.3 - Life Cycle
Factfinding is also known as:
A suitability
B know the client
C appropriateness
D treating the client fairly - Answer B
1.5 - Benefits of financial planning
If Jackie wants to maintain the real purchasing power of her life cover she should add which
option to the Term Assurance policy she is taking out?
,A Insurability
B Conversion
C Indexation
D Renewal - Answer C
2.4 - Ancillary/Optional benefits
The MAIN reason why the premium under a Term Assurance policy, which contains automatic
indexation of cover and premium, increases at a faster rate than the increase in cover is
because:
A commission is payable on each increase in premium
B the cost of life assurance cover increases with age
C stamp duty is payable on the increase in cover
D the life company imposes an increased administration charge - Answer B
2.4 - Ancillary/Optional benefits
The cost of life assurance policy will be cheaper if:
(i) the life assured is female
(ii) the life assured has existing cover in place with the life company
(iii) indexation is not added as an ancillary benefit.
A (i) only
B (i) and (ii) only
C (ii) and (iii) only
D (iii) only - Answer D
2.2.1 - Term Assurance
John and Maria have a dual life Term Assurance policy covering John for €100,000 and Maria for
€125,000 life assurance cover.
If they both die together in a car crash, what TOTAL amount will be paid out on the policy?
A €25,000
, B €100,000
C €125,000
D €225,000 - Answer D
2.2.1 - Term Assurance
Which one of the following statements regarding the exercise of a conversion option on a
Convertible Term Assurance (CTA) is CORRECT?
A The premium on the new policy cannot be more than the premium on the original CTA policy
B The option can be exercised, even if the life assured is then in bad health
C The option can be exercised only within three months after the CTA policy ends
D Only a portion of the cover on the CTA policy can be transferred to the new policy - Answer
B
2.2.2 - Convertible Term Assurance (CTA)
Which one of the following features CAN apply to a Pension Term Assurance policy?
A Lower rates for non-smokers
B Optional serious illness cover
C Joint life assurance cover
D A cash return on early termination - Answer A
2.2.3 - Pension Term Assurance
The death benefits paid out by a regular income benefit policy are treated in the hands of the
deceased's dependants for tax purposes as:
A income, liable to income tax
B capital instalments of the sum assured
cover
C investment gains, liable to capital gains tax
D investment gains, liable to exit tax - Answer B
2.2.4 - Regular Income Benefit
Study Guide with All Solved Solutions
2026-2027 Edition.
A need to accumulate a capital sum from regular surplus income over a period of time is which
type of personal financial need?
A Savings
B Investment
C Protection
D Loan - Answer A
1.1 - Main types of personal financial needs
The primary financial need of a client in their 60s is likely to be:
A savings
B investment
C protection
D loans - Answer B
1.3 - Life Cycle
Factfinding is also known as:
A suitability
B know the client
C appropriateness
D treating the client fairly - Answer B
1.5 - Benefits of financial planning
If Jackie wants to maintain the real purchasing power of her life cover she should add which
option to the Term Assurance policy she is taking out?
,A Insurability
B Conversion
C Indexation
D Renewal - Answer C
2.4 - Ancillary/Optional benefits
The MAIN reason why the premium under a Term Assurance policy, which contains automatic
indexation of cover and premium, increases at a faster rate than the increase in cover is
because:
A commission is payable on each increase in premium
B the cost of life assurance cover increases with age
C stamp duty is payable on the increase in cover
D the life company imposes an increased administration charge - Answer B
2.4 - Ancillary/Optional benefits
The cost of life assurance policy will be cheaper if:
(i) the life assured is female
(ii) the life assured has existing cover in place with the life company
(iii) indexation is not added as an ancillary benefit.
A (i) only
B (i) and (ii) only
C (ii) and (iii) only
D (iii) only - Answer D
2.2.1 - Term Assurance
John and Maria have a dual life Term Assurance policy covering John for €100,000 and Maria for
€125,000 life assurance cover.
If they both die together in a car crash, what TOTAL amount will be paid out on the policy?
A €25,000
, B €100,000
C €125,000
D €225,000 - Answer D
2.2.1 - Term Assurance
Which one of the following statements regarding the exercise of a conversion option on a
Convertible Term Assurance (CTA) is CORRECT?
A The premium on the new policy cannot be more than the premium on the original CTA policy
B The option can be exercised, even if the life assured is then in bad health
C The option can be exercised only within three months after the CTA policy ends
D Only a portion of the cover on the CTA policy can be transferred to the new policy - Answer
B
2.2.2 - Convertible Term Assurance (CTA)
Which one of the following features CAN apply to a Pension Term Assurance policy?
A Lower rates for non-smokers
B Optional serious illness cover
C Joint life assurance cover
D A cash return on early termination - Answer A
2.2.3 - Pension Term Assurance
The death benefits paid out by a regular income benefit policy are treated in the hands of the
deceased's dependants for tax purposes as:
A income, liable to income tax
B capital instalments of the sum assured
cover
C investment gains, liable to capital gains tax
D investment gains, liable to exit tax - Answer B
2.2.4 - Regular Income Benefit
