5. CIC & IPI

Question 1

What are the 3 core conditions that must be covered by CIC?

Answer 1

Cancer
Heart attack
Stroke resulting in permanent symptoms

Question 2

Describe combined needs / integrated cover CIC?

Answer 2

CIC added to life assurance policy

Question 3

Describe the difference between fixed and reviewable premiums (CIC)

Answer 3

Fixed; premiums fixed for term
Reviewable; reviewed after 5 years then annually - no further medical underwriting

Question 4

Key features of IPI? (5)

Answer 4

• premiums usually fixed
• available standalone, pure-protection or unit-linked
• insurer cannot cancel policy - can make multiple claims
• pays benefits if no longer able to work due to illness/disability (excl redundancy)
• deferred period 4-104 wks; align to ‘er sick pay policy

Question 5

What is the benefit level of IPI? (3)

Answer 5

50-75% pre-illness income across all IPI policies held
- can include proportionate benefit clause if claimant returns to work at lower wage - IPI tops up
- limited benefit option; limit benefit period to 1/2/5yrs for lower cost

Question 6

What is an age-costed premium and the 2 types?

Answer 6

Premiums increase with age

Guaranteed; base rate will not increase
Reviewable; premium can be re-based higher

Question 7

What is real life cover?

Answer 7

Combines Life, IPI and CIC. Total benefit is set then divided between covers. Plan ceases when total benefit exhausted

Question 8

What is meant by free cover?

Answer 8

Group policies where no medical underwriting is required

Question 9

What is a buyback option on a CIC policy?

Answer 9

Allows the insured to arrange limited ongoing cover following a successful claim