Friday Five Focus on Protection – 14 July – 5 Questions in 5 Minutes

Friday Five Focus on Protection – 5 Questions in 5 Minutes Every Friday

What’s this all about?

Each week, we ask questions relating to one of these topics: Investments, Taxation, Pensions, Protection, or Regulation. This week, our Friday Five is relevant to Protection; this is useful as you prepare for the CII’s R05 exam. The challenge is for you to answer them in 5 minutes. Answers at the bottom of the page.

Questions

IMPORTANT! These questions relate to examinable tax year 2022/23, examinable by the CII until 31 August 2023. They do not relate to tax year 2023/24 which is only examinable by the CII from 1 September 2023.

1. Arlene has taken out a unit-linked whole of life assurance policy on a standard cover basis. In which of the following situations would the premiums need to be increased?
   1. If her state of health changed
   2. The unit prices fall by more than 1.0% over a six-month period
   3. Every ten years in line with her increased age
   4. If the underlying fund did not meet a pre-determined rate of return each year.

2. Daniel’s company provides income protection for him, and they pay the premiums. For how long will the benefits usually be paid if he becomes ill?
   1. A maximum period of 2 years
   2. To the earliest of his recovery, leaving service or normal retirement date
   3. For a period chosen by the company
   4. For a period of between 2 and 6 years depending on the nature of Daniel’s incapacity

3. Stewart has a critical illness policy that has no attached life cover. When will he receive the payment from the policy if he makes a claim on the diagnosis of a critical illness?
   1. Within 45 days of making the claim
   2. Immediately
   3. When he has completed any required medical treatment
   4. When he has survived for a stated number of days after diagnosis

4. Which of the following categories of people is likely to benefit most from Income Protection?
   1. Self-employed
   2. Retired
   3. Employed
   4. Unemployed

5. Where an employer sets up group critical illness cover for their employees and pays the premiums, how will this be treated in relation to taxation when the benefits are paid directly to an employee?
   1. The premiums are taxed on the employee at 10%
   2. The benefits are liable to income tax at the employee’s rate
   3. The benefits are a taxable benefit in kind
   4. The premiums are a taxable benefit in kind

Answers

1. D – See R05 Study Text, Chp 4
   Grab our taster mock exam paper for CII R05. Click here to download.

2. B – See R05 Study Text, Chp 6
   Grab our taster mock exam paper for CII R05. Click here to download.

3. D – See R05 Study Text, Chp 7
   Grab our taster mock exam paper for CII R05. Click here to download.

4. A – See R05 Study Text, Chp 2
   Grab our taster mock exam paper for CII R05 Click here to download.

5. D – See R05 Study Text, Chp 7
   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?

If you found this quiz useful for your CII exam revision, please do share it with your colleagues.