Friday Five Focus on Protection – 29 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 2021/22, examinable by the CII until 31 August 2022. They do not relate to tax year 2022/23 which is only examinable by the CII from 1 September 2022.

1. Melvin has a ten-year qualifying life assurance policy. Which of the following situations would give rise to a chargeable event?
   1. Assignment for money’s worth in year 9
   2. Payment of any critical illness benefit
   3. A policy loan to buy a life annuity where the interest is eligible for tax relief
   4. A surrender of the policy after 6 years

2. Kevin is employed and receives sick pay from his employer. This is paid at full pay for six months and then half pay for a further six months. In arranging an income protection policy, he will be able to take out cover based on:
   1. half pay for months 7 – 12 and full pay from month 13
   2. half pay from month 7 only.
   3. full pay from month 13 only.
   4. full pay from the start of the policy only.

3. Critical illness underwriting is based on:
   1. marital status
   2. mortality risk
   3. smoking status
   4. morbidity risk

4. 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 5
   Grab our taster mock exam paper for CII R05. Click here to download.

2. A – 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.