Friday Five Focus on Protection – 5 Questions in 5 Minutes – 6 Feb 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. A life office is making a payment to a policyholder on the surrender of a life assurance policy that involved a chargeable gain. How will the life office pay the proceeds?
   1. Gross with deduction of no tax.
   2. After deduction of any tax due.
   3. Gross but with a tax invoice for the amount due.
   4. After deduction of fund tax only.

2. With a claim under a critical illness policy, the onus of proof is on the
   1. life office.
   2. policyholder.
   3. policyholder or their spouse.
   4. personal representatives of the policyholder.

3. Jack is looking at taking out a mortgage payment protection insurance policy. He should be aware that
   1. the cost of this cover tends to be relatively high compared to the benefit.
   2. benefits are usually payable for up to 60 months only.
   3. the premium will form part of his monthly mortgage payment.
   4. it covers the same risks as income protection insurance.

4. Protection against an inheritance tax liability may be beneficial for what reason?
   1. Estates over the value of the nil rate band are charged on an increasing scale.
   2. Unused allowances of spouses are lost.
   3. Executors are liable for paying any IHT before the estate is distributed.
   4. Transfers between spouses are only exempt up to the value of the nil rate band.

5. Tracy and Glen are married with 2 children aged 6 and 4 and want a critical illness policy with life cover. Which type of trust should they use?
   1. Split benefit trust.
   2. Discretionary trust.
   3. Absolute trust.
   4. Flexible trust.

Answers

1. D; See R05 Study Text, Chp 5; Rationale: Although the life office is deemed to have deducted 20% at source from the life fund, it will not deduct any income tax from the chargeable gain itself. The policyholder will need to pay any further income tax due to HMRC via self-assessment.
2. B; See R05 Study Text, Chp 7; Rationale: The onus is on the policyholder to prove that a CIC claim is payable.
3. A; See R05 Study Text, Chp 9; Rationale: The cost of MPPI tends to be relatively high compared with the level of benefit. It is usually paid for up to 24 months at most. The policies cannot be sold alongside a mortgage and are paid for separately. MPPI covers involuntary unemployment as well as health issues, which income protection does not.
4. C; See R05 Study Text, Chp 2; Rationale: Protection against an IHT liability may be beneficial, because executors are liable to pay the tax before they get access to the money in the estate itself. This means they generally cannot use the deceased’s own assets to pay off the IHT and may otherwise need to take out a loan to pay it.
5. A; See R05 Study Text, Chp 7; Rationale: Where life cover and critical illness cover (CIC) are provided in the same policy, it is best to use a split benefit trust. This allows the assured to receive any CIC benefit, while the life cover benefit is payable to their beneficiaries.

Grab the resources you need!

Being comfortable with individual protection topics is one thing; applying them consistently in an exam is another. Our CII R05 E-Mocks are designed to test understanding in the same style and format you’ll face on the day. Give the free R05 E-Mocks taster a try to support your revision.

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