CII R05 REVISION EXAM QUESTIONS WITH
ANSWERS CORRECT
Why do insurers need to be aware of changing social patterns? - ANSWER
Because people need products with greater flexibility, with new options and
ones that cover new risks
What does the life assurance protection gap signify? - ANSWER The shortfall
in the amount of cover needed to maintain current living standards
What is preferred life assurance? - ANSWER A product which segments lives
according to lifestyle or health characteristics
How can online portals lead to the commoditisation of term life assurance? -
ANSWER Because of their focus on price, rather than the benefits provided
Name 3 main types of financial protection cover - ANSWER - Life assurance.
- Income protection insurance (IP).
- Critical illness cover (CIC).
- Long-term care insurance (LTCI).
- Payment protection insurance (PPI).
- Personal accident and sickness insurance (PAS).
- Accident, sickness and unemployment insurance (ASU).
- Private medical insurance (PMI).
- Health cash plans.
Name some areas of protection - ANSWER - Health, incapacity or accident.
- Income, mortgage and other debt.
- Death.
- Asset protection.
- Business protection.
How is a policy changed on divorce? - ANSWER It doesn't, divorce does not
change a persons interest in a life policy unless a court orders an alteration.
, A review of cover should be reviewed on divorce or a dissolved long-term
relationship/civil partnership
Can you live off state benefits? - ANSWER In almost all cases, State benefits
would not be enough for an individual to live on, but it is important to take them
into account when assessing protection needs.
Name the two state benefit types - ANSWER - a contributory benefit (i.e. only
paid to those who have made certain National Insurance contributions (NICs))
- a non-contributory benefit, and whether the benefit is means-tested (i.e. paid
only to those with incomes or capital below a certain level).
Income related benefits - ANSWER For all working-age income-related
benefits, the first £6,000 of savings is ignored but any amount above this will
reduce the level of benefit payable until the threshold of £16,000 is reached.
Jobseekers allowance - ANSWER - Taxable, and available for people actively
seeking work.
- If enough NICs have been paid in the past, individuals can receive a new-style
contribution-based JSA.
- If income and savings are below a certain level can claim income-based JSA.
Statutory Sick Pay (SSP) - ANSWER - Benefit paid to employees who pay
Class 1 NICs, but taxable as earned income and subject to Class 1 NICs.
- Must be unable to work due to sickness for at least four or more days in a row.
- To be eligible the employee's gross earnings must be £123 a week or more.
Employment and Support Allowance (ESA) - ANSWER - New-style
allowance is taxable, and income-based allowance is tax free.
- Benefit paid to individuals who cannot work due to sickness or disability, with
the aim of helping them to work.
ANSWERS CORRECT
Why do insurers need to be aware of changing social patterns? - ANSWER
Because people need products with greater flexibility, with new options and
ones that cover new risks
What does the life assurance protection gap signify? - ANSWER The shortfall
in the amount of cover needed to maintain current living standards
What is preferred life assurance? - ANSWER A product which segments lives
according to lifestyle or health characteristics
How can online portals lead to the commoditisation of term life assurance? -
ANSWER Because of their focus on price, rather than the benefits provided
Name 3 main types of financial protection cover - ANSWER - Life assurance.
- Income protection insurance (IP).
- Critical illness cover (CIC).
- Long-term care insurance (LTCI).
- Payment protection insurance (PPI).
- Personal accident and sickness insurance (PAS).
- Accident, sickness and unemployment insurance (ASU).
- Private medical insurance (PMI).
- Health cash plans.
Name some areas of protection - ANSWER - Health, incapacity or accident.
- Income, mortgage and other debt.
- Death.
- Asset protection.
- Business protection.
How is a policy changed on divorce? - ANSWER It doesn't, divorce does not
change a persons interest in a life policy unless a court orders an alteration.
, A review of cover should be reviewed on divorce or a dissolved long-term
relationship/civil partnership
Can you live off state benefits? - ANSWER In almost all cases, State benefits
would not be enough for an individual to live on, but it is important to take them
into account when assessing protection needs.
Name the two state benefit types - ANSWER - a contributory benefit (i.e. only
paid to those who have made certain National Insurance contributions (NICs))
- a non-contributory benefit, and whether the benefit is means-tested (i.e. paid
only to those with incomes or capital below a certain level).
Income related benefits - ANSWER For all working-age income-related
benefits, the first £6,000 of savings is ignored but any amount above this will
reduce the level of benefit payable until the threshold of £16,000 is reached.
Jobseekers allowance - ANSWER - Taxable, and available for people actively
seeking work.
- If enough NICs have been paid in the past, individuals can receive a new-style
contribution-based JSA.
- If income and savings are below a certain level can claim income-based JSA.
Statutory Sick Pay (SSP) - ANSWER - Benefit paid to employees who pay
Class 1 NICs, but taxable as earned income and subject to Class 1 NICs.
- Must be unable to work due to sickness for at least four or more days in a row.
- To be eligible the employee's gross earnings must be £123 a week or more.
Employment and Support Allowance (ESA) - ANSWER - New-style
allowance is taxable, and income-based allowance is tax free.
- Benefit paid to individuals who cannot work due to sickness or disability, with
the aim of helping them to work.
