Friday Five Focus on Protection – 30 April – 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. They do not relate to tax year 2021/22 which is only examinable by the CII from 1 September 2021.

1. Graeme has set up an accident, sickness and unemployment insurance policy. Which of the following statements CORRECTLY explains the payment of his premiums and the tax treatment of the benefits?
   1. There is tax relief available on the premiums but the benefits are taxable.
   2. There is no tax relief on the premiums and the benefits are tax free.
   3. There is no tax relief on the premiums and the benefits are taxable.
   4. There is tax relief available on the premiums and the benefits are tax free.

2. Which of the following is NOT an argument in favour of taking out private medical insurance?
   1. It is more suitable for a patient with a chronic medical condition
   2. Avoids long waiting lists for NHS treatment
   3. Patient is normally able to choose their own hospital and surgeon
   4. Likely to have a private room rather than be on a general ward

3. Robert has life assurance provided by his employer through his pension scheme which includes a continuation option. This means that Robert can:
   1. always pay to continue the cover if he leaves the company.
   2. take out a new policy if he leaves the company based on his age at the time.
   3. continue to receive the cover at no cost if he leaves the company.
   4. transfer the cover to a new employer if he leaves the company.

4. The shortfall in the amount of cover necessary to maintain the current living standards of dependants can also be referred to as the:
   1. savings gap.
   2. pensions cap.
   3. investment gap.
   4. protection gap.

5. Carol and Emily run a hairdressing salon as a partnership. What will happen to the partnership if Carol dies and there is no partnership agreement in place?
   1. Carol’s share will pass to Emily who can continue as a sole trader.
   2. Emily can purchase Carol’s share and then continue as a sole trader.
   3. Emily will have the option of continuing the business or dissolving it.
   4. The partnership will be automatically dissolved.

Answers

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

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

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

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

5. D – See R05 Study Text, Chp 11
   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.