Friday Five Focus on Protection – 5 Questions in 5 Minutes – 13 Mar 2026

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 2025/26, examinable by the CII until 31 August 2026.

1. Carol is making her third claim on her income protection policy. How will her insurer treat the policy going forward?
   1. The insurer 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. When critical illness premiums are being determined by insurers, it is correct to say that
   1. premiums are more expensive for women.
   2. premiums are based on mortality statistics.
   3. reviewable premiums are dependent on the health of the insured.
   4. guaranteed premiums tend to be higher than reviewable premiums.

3. An accident, sickness and unemployment insurance policy may also pay a
   1. lump sum benefit for total and permanent disability.
   2. daily amount for each day spent in hospital.
   3. lump sum benefit for loss of a limb or sight.
   4. weekly amount for each week requiring home nursing care.

4. Lakeside Trading Ltd, provide their employees with sick pay if they are off work through illness or accident. If an employee receives these benefits, what taxes, if any, will they potentially be liable to on the money they receive?
   1. None – the money is free from liability to tax.
   2. National Insurance.
   3. Income Tax.
   4. Income Tax and National Insurance.

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. C; See R05 Study Text, Chp 6; Rationale: Income protection policies are permanent. An insurer cannot increase the premiums, cancel the policy or apply special terms or exclusions on account of the number of claims made. Carol’s policy will therefore continue on the original terms and premium.
2. D; See R05 Study Text, Chp 7; Rationale: Guaranteed premiums on critical illness policies tend to be higher than reviewable premiums. Premiums are unisex (gender neutral), based on morbidity statistics (not mortality) and reviewable premiums are based on the provider’s overall claims’ experience, not on the health of the individual life insured.
3. C; See R05 Study Text, Chp 9; Rationale: An accident, sickness and unemployment (ASU) policy may also pay out a lump sum benefit for loss of a limb or of sight.
4. D; See R05 Study Text, Chp 2; Rationale: Group income protection benefits are paid as earnings and are therefore potentially liable to both income tax and National Insurance.
5. D; See R05 Study Text, Chp 7; Rationale: The premiums for group critical illness cover are treated as a taxable benefit in kind when they are paid by the employer. This means the taxable value of the premium will be included in the employee’s earnings for income tax purposes. Only employers pay National Insurance contributions on taxable employee benefits.

Grab the resources you need!

If you want a clearer sense of what exam-standard R05 questions look like, structured mock exams make the difference. Our full R05 E-Mocks are built to reflect the real paper. Access the free taster to preview the layout, style and depth of the complete resource.

Think your colleagues would benefit from this quiz? Share it with them and support their CII exam success.