Friday Five Focus on Protection – 31 December – 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. Sheila is being advised to place her life assurance policy in trust. If she does this, which of the following statements is true?
   1. The policy remains in Sheila’s ownership until her death.
   2. The proceeds will go directly to the beneficiaries on her death after probate.
   3. The policy is not normally protected from creditors if Sheila is declared bankrupt.
   4. The premiums and the proceeds are normally exempt from inheritance tax.

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. In calculating the maximum benefit payable under an income protection policy, some companies include which of the following to the definition of ‘total IP benefits’?
   1. State disability benefits and sick pay from an employer
   2. State disability benefits
   3. Sick pay from an employer
   4. Compensation payments received for accidents at work

4. Susan had an endowment policy assigned to her and is now making a maturity claim to the life office. To receive the benefits, she will need to produce:
   1. the deed of assignment.
   2. the policy document and deed of assignment.
   3. the policy document.
   4. the policy document, deed of assignment and a letter from the assignor.

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. D – See R05 Study Text, Chp 4
   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. A – See R05 Study Text, Chp 6
   Grab our taster mock exam paper for CII R05. Click here to download.

4. B – 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.