Friday Five Focus on Protection – 26 November – 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 2021/22, examinable by the CII until 31 August 2022.

1. A cross-option arrangement for a partnership is most beneficial for:
   1. Situations where own life policies in trust are to be used for the protection policies
   2. Obtaining tax relief on the premiums of associated life assurance policies
   3. Obtaining tax free benefits from associated life assurance policies
   4. Preserving business property relief for inheritance tax purposes

2. Helen has made a chargeable gain of £4,500 on the surrender of her non-qualifying life assurance policy. If her taxable income in 2021/22 is £40,000 she will be liable for which of the following taxes on the gain?
   1. Capital gains tax at 10%
   2. Capital gains tax at 20%
   3. Income tax at an extra 20%
   4. Income tax at an extra 40%

3. Peter made a PET of £240,000 in September 2019. Which of the following statements CORRECTLY explains the inheritance tax implications on his estate if he died in March 2021 assuming no annual allowances were available?
   1. The tax payable on his estate would be increased by £96,000
   2. Taper relief reduces the gift value to £192,000, leaving a nil rate band of £133,000
   3. The tax payable on his estate would be reduced by £96,000
   4. The nil rate band available against his estate would be reduced to £85,000

4. George has a term assurance policy that includes terminal illness benefit. If he makes a claim, it will be paid if the life office decides that his life expectancy is less than:
   1. 6 months
   2. 18 months
   3. 12 months
   4. 9 months

5. Evelyn has just taken out a new mortgage and is interested in taking out mortgage payment protection insurance. For how long must the lender wait before they can set this up?
   1. 3 days
   2. 7 days
   3. 14 days
   4. 21 days

Answers

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

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

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

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

5. B – 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?

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