Chapter 3.1

Question 1

While insuring against minor, frequent risks may be expensive and pointless it makes sense to insure against ____ ______ types of risk.

Answer 1

high impact

Question 2

Some of the main events that have high potential impact on individuals and their families are _______ _______, __________ and _____.

Answer 2

Serious illness - disability - death

Question 3

Protection insurance refers to the type of insurance contracts that provide financial sums in the event of ____-____ _______, __________ or _____.

Answer 3

Long term illness - disability - death

Question 4

While there are numerous state benefits available, they have ___________ ____________ and are unlikely to provide enough to live on.

Answer 4

eligibility requirements

Question 5

The advantage of employer provided financial protection is that the employer will usually bear some or all of the cost. The disadvantage is that the benefit will stop if the ________ ______ or the employer decides to ________ __.

Answer 5

Employee leaves - withdraw it

Question 6

The main types of protection policies are ___ assurance, ______ protection, ________ _______ cover, personal ________ and ________ insurance, private _______ insurance, accident, sickness and ____________ insurance and _______ protection insurance.

Answer 6

life - income - critical illness - accident - sickness - medical - unemployment - payment

Question 7

A whole of life policy and a whole life policy is a ____ - ____ insurance policy designed to pay out a ___ ___ __ on death whenever that occurs.

Answer 7

long - term - cash - lump - sum

Question 8

Policies may be ___ - profit, ____ profit or ____ - ______.

Answer 8

non - with - unit - linked

Question 9

The three main options when choosing a whole of life assurance policy are _______ cover plans, ________ cover plans and __________ cover plans.

Answer 9

Maximum - Standard - Guaranteed

Question 10

Term assurance pays out a cash lump sum on _____ if it occurs during the term of the policy.

Answer 10

Death

Question 11

There are several types of term assurance: _____ term assurance, __________ term assurance, term ___, __________ term assurance, ________ protection assurance, gift _____ _____ term assurance and ______ income _______ (FIB).

Answer 11

Level - Increasing - 100 - Decreasing - mortgage - inter vivos - Family - Benefit

Question 12

To determine the amount and type of life cover an individual needs it is necessary to consider who needs to be _______, the amount of _____ ______ and the ____ cover which it is required.

Answer 12

insured - cover needed - term

Question 13

A policy can be own life, life of another, joint life _____ death or joint life ______ death

Answer 13

first - second

Question 14

It is important to distinguish between _______ and income needs and between short and long term needs.

Answer 14

Capital

Question 15

In order for the insurer to be sure it will have enough funds to pay out all the claims, there has to be a relationship between the _______ charged and the _______ given under a policy.

Answer 15

premium - benefit

Question 16

In life assurance it is possible to predict how many claims there will be using _________ tables.

Answer 16

mortality

Question 17

Adjustments or loadings are made to arrive at the actual premium chargeable, such as a loading to cover the expenses of the life ______ and ______.

Answer 17

office - profit

Question 18

____________ is a process that an insurance company uses in order to assess the risk posed by the potential clients and whether it will provide cover.

Answer 18

Underwriting

Question 19

Clients can be preferred, standard, rated, postponed or declined depending on their _______________.

Answer 19

characteristics

Question 20

The underwriting process covers collecting ___________, analysing that information and identifying the _______ available in the light of the information.

Answer 20

information - options

Question 21

Under the ________ Insurance (Disclosure and Representations) Act 2012, if an insurer wants to know something it must ask a clear and specific question on the ________ form.

Answer 21

Consumer - proposal

Question 22

If misrepresentation on the part of a client is discovered, how the _______ can respond depends on the type of misrepresentation it was: negligent misrepresentation means that a proportionate remedy will apply, and following deliberate misrepresentation the insurer can void the policy from inception.

Answer 22

insurer

Question 23

Terminal illness benefit (TIB) is an additional benefit added to life policy which means that if the life assured becomes terminally ill with a life expectancy of less than __ months, the sum assured is paid.

Answer 23

12

Question 24

The tax _________ policy is determined by whether it is a qualifying policy or a non-qualifying policy.

Answer 24

treatment

Question 25

The life ______ must be sure that every claim is valid and that it pays the right amount to the right person.

Answer 25

office

Question 26

For a death claim, proof of death is required. In the UK, this is an ________ death certificate.

Answer 26

original

Question 27

Where the policy is an own life policy, the appropriate _____ of representation document will be needed to prove who is acting on behalf of the ______.

Answer 27

grant - estate

Question 28

A _____ is a legal arrangement under which one party creates a legal framework to hold ______ for a third party or third parties. Creating one requires specialist advice.

Answer 28

trust - assets

Question 29

A trust can be used with ____ _________ policies to speed up the distribution of money to beneficiaries on death, build up a fund that is free of IHT and provide flexibility over who receives the money from the trust

Answer 29

life assurance

Question 30

The ________ paid on the policy represent payments made into the trust and so long as they fall within one of the IHT exemptions they are free of any potential charge to IHT.

Answer 30

premiums