Friday Five Focus on Protection – 26 March – 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 2020/21, examinable by the CII until 31 August 2021.

1. Carol is making her third claim on her income protection policy. Which of the following statements is CORRECT regarding how her insurer will treat the policy?
   1. They will increase the premiums at the start of the next policy year.
   2. They can cancel the policy.
   3. The policy will continue on the original terms and premium.
   4. They can impose special terms or exclusions.

2. Avril wants a low-cost policy that will help to pay for any medical care she requires. A disadvantage of a basic private medical insurance plan rather than a comprehensive policy is:
   1. the cost of drugs required in treatment is not covered.
   2. treatment relating to substance abuse is unlikely to be covered.
   3. normal pregnancy will not be covered.
   4. there may be fairly low limits on the cost of treatment covered in one year.

3. George, a key person of Romulus Ltd is currently off work after an accident and receiving an income from an income protection plan taken out by his employer. How are the benefits from the policy treated in relation to the company’s taxation?
   1. They are taxable only if they exceed £1,000 per month.
   2. They are free from any liability for tax.
   3. They are paid as a regular income and therefore taxable.
   4. Any excess over £1,000 per month is taxable.

4. Which of the following is a form of decreasing term assurance?
   1. Convertible term assurance
   2. Flexible whole of life
   3. Maximum investment plan
   4. Family Income Benefit

5. The Free Asset Ratio (FAR) of a life office gives an indication of:
   1. annual new business.
   2. future profit.
   3. pay claim history.
   4. financial strength.

Answers

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

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

3. C – See R05 Study Text, Chp 11
   Grab our taster mock exam paper for CII R05. Click here to download.

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

5. D – See R05 Study Text, Chp 10
   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.