Chapter 4 Life Assurance

Question 1

Trusts used before 2006

Answer 1

Flexible interest in possession trust

Question 2

Flexible interest in possession trust- features

Answer 2

Settle specifies potential beneficiaries and nominates one or more to have an interest in possession.
If no other action taken, the beneficiary will receive the trust proceeds

Question 3

Law which modernise trusts and trust tax law

Answer 3

Finance Act 2006 brought the treatment of new interest in possession trust in line with discretionary trusts

Question 4

Finance Act 2006 and trusts

Answer 4

CLIT

Periodic Charge every 10byears

Question 5

Becoming an untrustee

Answer 5

Trustees may freely resign but it’s difficult to remove them

Apply to court to remove them

Question 6

Which policies be written in trust

Answer 6

Any existing life assurance policy, not in trust or assigned to a third party
Any new policy unless it is assigned to a third party
Any life assurance written as part of a pension scheme

Question 7

MWPA can only be uses

Answer 7

At outset

Question 8

Critical illness and type of trust

Answer 8

A split trust

Question 9

Typical moratorium - short term policy

Answer 9

Excludes pre-existing conditions during the past 5 years for 2 years and for 2 years after any treatment or check up during 2 year period

Question 10

Tele-underwriting /tele-underwriting

Answer 10

Most questions asked over the phone/Most questions asked on form

Question 11

Controller GDPR

Answer 11

Says how and why personal data is processed

Question 12

Processor- GDPR

Answer 12

Acts on controllers behalf- new obligations for processors under GDPR

Question 13

Fine for serious data breach

Answer 13

£17m or €20m or 4% of global turnover

Question 14

Who do underwriters refer complex cases too

Answer 14

Chief medical officer or reinsurer

Question 15

Age rating vs extra mortality rating

Answer 15

Age rating- treats insured aa if x years older. Additional costs expressed as % increase in premium

Question 16

Liens

Answer 16

Reduced sum assured

Question 17

Higher risk- long term policy

Answer 17

Higher premium

Question 18

Higher risk short term

Answer 18

Excludes pre-existing conditions

Question 19

FOS and utmost good faith

Answer 19

Insurers not to rely on strict interpretation of the rule
Firms basis of 
Consumer insurance ( disclosure and representation ) act 2012

Question 20

3 natures of non disclosure

Answer 20

Reasonable
Careless
Deliberate or reckless