CII R01 CORE EXAMS SETS UPDATED QUESTIONS AND
ANSWERS GRADED A+
✔✔Decreasing term assurance - ✔✔A type of term assurance where premiums are
generally lower than for level term and are designed for loans that are gradually being
repaid.
✔✔Family income benefit - ✔✔A form of decreasing term assurance that provides a
series of regular payments instead of a lump sum.
✔✔Increasable term assurance - ✔✔A type of term assurance with higher premiums
that increase as the sum assured increases, maintaining its value against inflation.
✔✔Convertible term assurance - ✔✔Allows conversion to an endowment or whole of life
policy with the same sum assured.
✔✔Renewable term assurance - ✔✔Guaranteed right to extend without further
evidence; premiums are low but will increase with age each time a policy is renewed.
✔✔Endowment policies - ✔✔Policies that pay a lump sum on death but are primarily
savings vehicles with life cover, not ideal for high cover needs due to cost.
✔✔Whole of life policies - ✔✔Lifetime cover with optional investment elements.
✔✔Non-profit whole of life policy - ✔✔A type of whole of life policy with a fixed payout
and low surrender value.
✔✔With-profit whole of life policy - ✔✔A type of whole of life policy with a guaranteed
minimum level that increases annually by reversionary bonuses.
✔✔Flexible/unit-linked policy - ✔✔A policy with adjustable cover and investment
balance, where premiums buy units in funds offered by the life office.
✔✔Income Protection - ✔✔Replaces income during illness/accident, with deferred
periods affecting premiums (4, 13, 26 and 52 weeks). Benefits are tax-free and paid
until death or return to work.
✔✔Permanent health insurance (PHI) - ✔✔Previously called income protection, typically
pays 50-60% of earnings.
✔✔Personal accident and sickness insurance - ✔✔Pays regular benefit and lump sums
for specific injuries, with shorter benefit periods and simpler underwriting than income
protection.
,✔✔Accident, Sickness and Unemployment (ASU) - ✔✔Adds unemployment cover to
personal accident and sickness insurance, with annual policies and 1-2 year payout
limits.
✔✔Critical Illness Cover - ✔✔Pays lump sum on diagnosis of specified illnesses, often
combined with life cover, covering conditions like heart attack, stroke, and cancer.
✔✔Reviewable Critical Illness Cover policies - ✔✔Policies that are reviewed every 5 or
10 years, typically cheaper due to future medical advances.
✔✔Private Medical insurance - ✔✔Covers inpatient and outpatient treatments, can be
underwritten or moratorium-based, and excludes pre-existing conditions.
✔✔Long term care insurance - ✔✔Supports care needs due to illness or age, with
immediate care bought when care is needed.
✔✔Pre-funded long term care insurance - ✔✔Bought in advance (not currently
available), pays out a regular sum if care is needed, usually starts when they can no
longer perform a number of activities.
✔✔Payment Protection Insurance - ✔✔Linked to loans/mortgages, covers redundancy,
accident, and sickness, with monthly premiums and limited payout periods.
✔✔Mortgage payment protection insurance - ✔✔Includes accident, sickness, and
unemployment cover. Must meet standards set by UK Finance and ABI: Pay out after
max 60 days off work; Minimum 12 months cover; Covers self-employed under ESA;
Can cover mortgage-related premiums.
✔✔Scope of state benefits - ✔✔Benefits are administered by the Department for Work
and Pensions (DWP). They vary by: Contributory vs. non-contributory status; Means-
tested vs. universal access; Taxable vs. non-taxable status.
✔✔Benefit Cap - ✔✔A cap limits the total benefits a household can receive, based on
average earnings. Applies to working-age households.
✔✔Benefit cap for 2025/26 - ✔✔Couple/Single Parent (p.w./p.m.): Outside Greater
London £423.46 / £1,835; Single, No Children (p.w./p.m.): Outside Greater London
£283.71 / £1,299.42; Inside Greater London £486.98 / £2,110.25; Single, No Children
(p.w./p.m.): Inside Greater London £326.29 / £1,413.92.
✔✔Exemptions from Benefit Cap - ✔✔Include Universal Credit and any benefits like
PIP, DLA, Carer's Allowance, and ESA (support component) amongst others.
, ✔✔Universal Credit - ✔✔Introduced in 2013 to consolidate multiple benefits into one
monthly payment. Transition to Universal Credit is ongoing, with completion expected
by 2028.
✔✔Standard allowance - ✔✔The basic rate included when calculating how much
Universal Credit people get, which depends on the claimant's age and whether they are
making a single or joint claim.
✔✔Elements in Universal Credit - ✔✔Extra amounts that may be payable for people in
different circumstances - for example, if they have children, a disability or health
condition which prevents them from working, or they need help with paying their rent.
✔✔Goals of Universal Credit - ✔✔Improve work incentives; Simplify transitions in/out of
work; Reduce poverty and fraud; More cost effective to run; Encourage monthly
budgeting.
✔✔Child Benefit - ✔✔Non-means tested, charge is payable if either has income over
£60k; Non-taxable; 2025/26 Rates: £26.05 p.w. (first child), £17.25 p.w. (others).
✔✔Maternity Allowance - ✔✔Contributions-based; Non-taxable; 2025/26 Rates:
£187.18 p.w. (or 90% of earnings).
✔✔Statutory Adoption Pay - ✔✔Provides help for adoptive parents to take time off work
after adopting a child. It is paid on the same basis as Statutory Maternity Pay.
✔✔Statutory Maternity Pay - ✔✔Paid for the first six weeks at 90% of their average
weekly earnings (before tax) with no upper limit and, for the remaining 33 weeks, at the
lower of either the standard rate or 90% of their average weekly earnings (before tax).
✔✔Statutory Neonatal Care Pay - ✔✔To qualify for Statutory Neonatal Care Pay
(SNCP) the claimant must be an employee, have a minimum of 26 weeks of continuous
service and earn above the lower earnings limit. SNCP can be paid for up to 12 weeks
within the first 68 weeks of the child's birth.
✔✔Statutory Paternity Pay - ✔✔Paid for one or two consecutive weeks at the standard
rate or 90% of their average weekly earnings (before tax) if this is less. Must have
worked for the same employer without a break for at least 26 weeks by the 15th week
before the baby is due.
✔✔Statutory Shared Parental Pay - ✔✔New parents can share up to 50 weeks of leave
and up to 37 weeks of pay between them.
✔✔Income Support - ✔✔Means-tested benefit that is non-taxable, with rates between
£72.90 and £144.65 per week.
ANSWERS GRADED A+
✔✔Decreasing term assurance - ✔✔A type of term assurance where premiums are
generally lower than for level term and are designed for loans that are gradually being
repaid.
✔✔Family income benefit - ✔✔A form of decreasing term assurance that provides a
series of regular payments instead of a lump sum.
✔✔Increasable term assurance - ✔✔A type of term assurance with higher premiums
that increase as the sum assured increases, maintaining its value against inflation.
✔✔Convertible term assurance - ✔✔Allows conversion to an endowment or whole of life
policy with the same sum assured.
✔✔Renewable term assurance - ✔✔Guaranteed right to extend without further
evidence; premiums are low but will increase with age each time a policy is renewed.
✔✔Endowment policies - ✔✔Policies that pay a lump sum on death but are primarily
savings vehicles with life cover, not ideal for high cover needs due to cost.
✔✔Whole of life policies - ✔✔Lifetime cover with optional investment elements.
✔✔Non-profit whole of life policy - ✔✔A type of whole of life policy with a fixed payout
and low surrender value.
✔✔With-profit whole of life policy - ✔✔A type of whole of life policy with a guaranteed
minimum level that increases annually by reversionary bonuses.
✔✔Flexible/unit-linked policy - ✔✔A policy with adjustable cover and investment
balance, where premiums buy units in funds offered by the life office.
✔✔Income Protection - ✔✔Replaces income during illness/accident, with deferred
periods affecting premiums (4, 13, 26 and 52 weeks). Benefits are tax-free and paid
until death or return to work.
✔✔Permanent health insurance (PHI) - ✔✔Previously called income protection, typically
pays 50-60% of earnings.
✔✔Personal accident and sickness insurance - ✔✔Pays regular benefit and lump sums
for specific injuries, with shorter benefit periods and simpler underwriting than income
protection.
,✔✔Accident, Sickness and Unemployment (ASU) - ✔✔Adds unemployment cover to
personal accident and sickness insurance, with annual policies and 1-2 year payout
limits.
✔✔Critical Illness Cover - ✔✔Pays lump sum on diagnosis of specified illnesses, often
combined with life cover, covering conditions like heart attack, stroke, and cancer.
✔✔Reviewable Critical Illness Cover policies - ✔✔Policies that are reviewed every 5 or
10 years, typically cheaper due to future medical advances.
✔✔Private Medical insurance - ✔✔Covers inpatient and outpatient treatments, can be
underwritten or moratorium-based, and excludes pre-existing conditions.
✔✔Long term care insurance - ✔✔Supports care needs due to illness or age, with
immediate care bought when care is needed.
✔✔Pre-funded long term care insurance - ✔✔Bought in advance (not currently
available), pays out a regular sum if care is needed, usually starts when they can no
longer perform a number of activities.
✔✔Payment Protection Insurance - ✔✔Linked to loans/mortgages, covers redundancy,
accident, and sickness, with monthly premiums and limited payout periods.
✔✔Mortgage payment protection insurance - ✔✔Includes accident, sickness, and
unemployment cover. Must meet standards set by UK Finance and ABI: Pay out after
max 60 days off work; Minimum 12 months cover; Covers self-employed under ESA;
Can cover mortgage-related premiums.
✔✔Scope of state benefits - ✔✔Benefits are administered by the Department for Work
and Pensions (DWP). They vary by: Contributory vs. non-contributory status; Means-
tested vs. universal access; Taxable vs. non-taxable status.
✔✔Benefit Cap - ✔✔A cap limits the total benefits a household can receive, based on
average earnings. Applies to working-age households.
✔✔Benefit cap for 2025/26 - ✔✔Couple/Single Parent (p.w./p.m.): Outside Greater
London £423.46 / £1,835; Single, No Children (p.w./p.m.): Outside Greater London
£283.71 / £1,299.42; Inside Greater London £486.98 / £2,110.25; Single, No Children
(p.w./p.m.): Inside Greater London £326.29 / £1,413.92.
✔✔Exemptions from Benefit Cap - ✔✔Include Universal Credit and any benefits like
PIP, DLA, Carer's Allowance, and ESA (support component) amongst others.
, ✔✔Universal Credit - ✔✔Introduced in 2013 to consolidate multiple benefits into one
monthly payment. Transition to Universal Credit is ongoing, with completion expected
by 2028.
✔✔Standard allowance - ✔✔The basic rate included when calculating how much
Universal Credit people get, which depends on the claimant's age and whether they are
making a single or joint claim.
✔✔Elements in Universal Credit - ✔✔Extra amounts that may be payable for people in
different circumstances - for example, if they have children, a disability or health
condition which prevents them from working, or they need help with paying their rent.
✔✔Goals of Universal Credit - ✔✔Improve work incentives; Simplify transitions in/out of
work; Reduce poverty and fraud; More cost effective to run; Encourage monthly
budgeting.
✔✔Child Benefit - ✔✔Non-means tested, charge is payable if either has income over
£60k; Non-taxable; 2025/26 Rates: £26.05 p.w. (first child), £17.25 p.w. (others).
✔✔Maternity Allowance - ✔✔Contributions-based; Non-taxable; 2025/26 Rates:
£187.18 p.w. (or 90% of earnings).
✔✔Statutory Adoption Pay - ✔✔Provides help for adoptive parents to take time off work
after adopting a child. It is paid on the same basis as Statutory Maternity Pay.
✔✔Statutory Maternity Pay - ✔✔Paid for the first six weeks at 90% of their average
weekly earnings (before tax) with no upper limit and, for the remaining 33 weeks, at the
lower of either the standard rate or 90% of their average weekly earnings (before tax).
✔✔Statutory Neonatal Care Pay - ✔✔To qualify for Statutory Neonatal Care Pay
(SNCP) the claimant must be an employee, have a minimum of 26 weeks of continuous
service and earn above the lower earnings limit. SNCP can be paid for up to 12 weeks
within the first 68 weeks of the child's birth.
✔✔Statutory Paternity Pay - ✔✔Paid for one or two consecutive weeks at the standard
rate or 90% of their average weekly earnings (before tax) if this is less. Must have
worked for the same employer without a break for at least 26 weeks by the 15th week
before the baby is due.
✔✔Statutory Shared Parental Pay - ✔✔New parents can share up to 50 weeks of leave
and up to 37 weeks of pay between them.
✔✔Income Support - ✔✔Means-tested benefit that is non-taxable, with rates between
£72.90 and £144.65 per week.
