Friday Five Focus on Protection – 5 Questions in 5 Minutes – 24 Oct 2025

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. Colin and Evelyn want a life assurance policy to meet the potential inheritance tax bill on their joint estate of £1,150,000 which they own in equal shares and includes the family home valued at £500,000. On the first death, they plan to leave their estate to each other and then on the second death to their children. If they were both to die in the current tax year, the most effective policy would be a
   1. joint life second death policy for £32,000
   2. joint life second death policy for £60,000
   3. joint life first death policy for £140,000
   4. joint life second death policy for £150,000

2. Karina has a combined life assurance and critical illness policy. What will happen to the sum assured on death if she makes a claim on the diagnosis of a critical illness? It will
   1. continue at the original amount for a maximum of five years.
   2. continue at half the original amount.
   3. only continue to exist if Karen survives for a minimum of two years.
   4. not exist as if there is a CIC payout, there is no further payment on death.

3. A client who is in poor health and already needs care will most likely benefit from what type of policy?
   1. Immediate needs plan.
   2. Prefunded policies.
   3. Deferred care plan.
   4. Traditional insurances.

4. Craig is one of three partners in a partnership and has £80,000 in the capital account. On his death, this is treated as an asset of
   1. the partnership.
   2. his estate and repayable immediately.
   3. his estate and the partnership equally.
   4. the partnership up to the amount stated in the partnership agreement with the remainder being due to his estate.

5. Pauline is returning to a different employment after a period of illness when she was claiming benefits from her income protection policy. If this results in her receiving a lower level of pay, which benefit may her policy pay to her?
   1. A lump sum payment.
   2. A proportionate benefit in relation to her new earnings.
   3. A rehabilitation benefit in relation to her new earnings.
   4. The same level of benefit for a maximum of 2 years.

Answers

1. B; See R05 Study Text, Chp 5; Rationale: There will be no IHT due on first death as the couple are leaving everything to each other, and this will be exempt under the spousal exemption. On second death, the IHT bill will be £1,150,000 less 2 x nil rate bands (£650,000 in 2025/26) less 2 x residence nil rate bands (£350,000 in 2025/26) = £150,000. As the property is valued at above £350,000, the main residence nil rate bands can be used in full. The excess is taxed at 40% (the rate at which IHT is due on death) = £60,000. The policy required is therefore a joint life second death with a sum assured of £60,000. This should be written under trust.
2. D; See R05 Study Text, Chp 7; Rationale: If Karina claims on the diagnosis of a critical illness, a combined life and critical illness policy will not pay out a further sum on her death, as the critical illness benefit will be viewed as an accelerated death benefit.
3. A; See R05 Study Text, Chp 8; Rationale: If the individual is in poor health and already needs care, or is about to go into a nursing home, it is possible to buy a policy that will begin paying for care immediately.
4. B; See R05 Study Text, Chp 11; Rationale: On Craig’s death, his £80,000 in the capital account is treated as an asset of his estate and needs to be repaid by the partnership with immediate effect.
5. B; See R05 Study Text, Chp 6; Rationale: An income protection policy may pay a proportionate benefit, where a claimant returns to the workforce, but in a different job and on lesser pay. It is a reduced level of benefit aimed at topping up the new earnings. This is to encourage claimants to return to work, even if they are not able to take up their old position due to their current state of health.

Grab the resources you need!

Strengthen your R05 exam preparation with our CII R05 E-Mocks. These online practice papers mirror real exam conditions, helping you check your knowledge and build confidence before exam day. Start with a free taster to see how effective structured practice can be.

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