Case Study 1 Q And A

Question 1

Advantages of combined life or earlier CIC instead of standalone x3

Answer 1

Premiums may be cheaper than two policies

One underwriting process

Split benefit trust, CIC paid to assured and death benefit to trustees

Question 2

Disadvantages of combined life or earlier CIC instead of standalone x4

Answer 2

One pay out

One term may not be suitable as same

One sum assured may not be suitable

May struggle to get life cover once CIC paid out

Question 3

Factors to consider b fire joining new employers PMI x6

Answer 3

Any excesses

Mike/twins covered

If employer pays premiums benefit in kind and income tax and CB implications

Pay upfront and claim from insurer or insurer pays first

Choice of hospital and doctor

Any restrictions

Question 4

Reduce child benefit charge x3

Answer 4

Shy wan pay £3,900 gross into pension £3,120 net

Reduces net income to £50k and therefore no CB tax charge

If HRT then get 40% tax relief via self assessment brining net contribution to £2,340

Question 5

Making use of child benefit and improving position in retirement x3

Answer 5

Mike could claim CB until the twins are age 12 and gives him NICs towards state pension

Shuwan does not get if she claims

Mike will get 5 years NI contributions to state pension

Question 6

Other ways to improve position in retirement x3

Answer 6

Shuwan increase pension contribution for possible employer matching

Mike pay £3,600 gross or £2,880 net to personal pension arrangement

Shuwan transfer old GPP to new GPP for better charges, performance, management

Question 7

How to find SPA and benefits of doing so x3

Answer 7

Complete BR 19 form which can be done online

Shows age of state pension entitlement

Shows value of state pension entitlement

Question 8

State benefit to claim on event of death (bereavement support) x3

Answer 8

Deceased must have had 25 weeks NI contributions in working like

Claim within 3 months of being deceased

£3,500 limp sum and £350 for 18 months

Question 9

Shuwan transferring from previous employer GPP to current, points to consider x5

Answer 9

Charges comparison

Transfer accepted

Transfer charges

Funds available in both

Find performance of both

Question 10

Lifetime ISA features and how used for pension planning x6

Answer 10

Mike can’t open as 40, shuwan can

Invest in cash and stocks and shares

£4,000 annually pay in, counts towards £20k annual allowance

25% bonus on contributions to age 50

25% penalty if taken before age 60

Penalty free if taken after age 60

Question 11

Mike and shuwan savings and investments additional points x3

Answer 11

Used isa allowances

Mike OEIC - income and CGT tax

Shuwan isa not attuned to her alATR as high risk when she is a medium