Friday Five – 9 November – 5 Questions in 5 Minutes

Welcome to this week’s Friday Five – 5 Questions in 5 Minutes Every Friday

What’s this all about?

It’s a bit of Friday Fun where we provide you with 5 questions relevant to a mix of CII exams. The challenge is for you to answer them in 5 minutes. Answers at the bottom of the page.

Questions

These questions relate to examinable tax year 2018/19, examinable until 31 August 2019.

1. What is the purpose of the cooling-off period under consumer credit legislation?
   1. To allow the borrower sufficient time to change their mind and withdraw from a loan agreement if required
   2. To allow the lender sufficient time to consider all material facts before making an offer to the borrower
   3. To allow the intermediary sufficient time to complete their research before presenting their recommendations to the client
   4. To allow the borrower to gather all requested documentation and to complete all required paperwork

2. The capital element of a purchased life annuity is:
   1. tax free because it is deemed to be a return of the annuitant’s original capital
   2. tax free in order for it compete like for like with a pension annuity
   3. taxable as savings but cannot be set off against the personal savings allowance
   4. taxable as investment income which can be offset against the dividend allowance

3. Susan is considering purchasing unit trusts and OEICs. She should be aware that: Tick all that apply.
   1. Both products are exempt from Capital Gains Tax in the hands of the investor
   2. She will be buying units in the unit trust and shares in the OEIC
   3. Both unit trusts and OEICs are classed as collective investments
   4. Dividends from both products are paid gross

4. Caroline died aged 66 with uncrystallised funds valued at £1,600,000. What is the lifetime allowance charge (if any) if benefits over the lifetime allowance are paid as a dependant’s lifetime annuity within two years of her death?
   1. No charge.
   2. £313,500.
   3. £142,500.
   4. £57,000.

5. A group accident, sickness and unemployment policy has which advantage over an individual policy?
   1. Unrestricted cover for accidents
   2. Enhanced benefit amounts
   3. No deferred periods
   4. Preferential premiums and underwriting

Answers

1. A – See R01 Study Text, Chp 5:2
   Grab our taster mock exam paper for CII R01. Click here to download.

2. A – See R02 Study Text, Chp 6:2
   Grab our taster mock exam paper for CII R02. Click here to download.

3. BCD – See R03 Study Text, Chp 10
   Grab our taster mock exam paper for CII R03. Click here to download.

4. C – See R04 Study Text, Chp 2:2
   Grab our taster mock exam paper for CII R04. Click here to download.

5. D – See R05 Study Text, Chp 9
   Grab our taster mock exam paper for CII R05. Click here to download.

How did you find this week’s questions? Did you complete them in 5 minutes? Did you get them all correct? Do you disagree with any?

Do let us know by leaving a comment below – we promise to read them all. (Humour particularly appreciated on a Friday!)