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Cii - RO5 Financial Protection 2020/21 > Chapter 9- Other Insurance Based Products > Flashcards

Chapter 9- Other Insurance Based Products Flashcards

1
Q

How long does a Personal, Accident and Sickness (PAS) policy usually last?

A

Annual, monthly or shorter, eg. for a holiday

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2
Q

Name 6 common areas of cover for PAS cover:

A
  1. Death
  2. Permanent disablement
  3. Loss of an eye
  4. Loss of leg, foot or toe
  5. Loss of arm, hand, finger, thumb
  6. Other specified injuries or accidents
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3
Q

What are the common benefits included in PAS cover?

A
  • Lump sum which varies based on severity
  • Refund medical costs
  • Weekly sickness benefit paid for 26/52/104 weeks if unable to work
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4
Q

Is there any tax relief on PAS insurance?

A

PAS

  • No tax relief on premiums or taxation on benefits for individuals.
  • Group - if employer pays premiums - subject to income tax under PAYE which they can claim as a business expense.
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5
Q

Who is PAS cover aimed at?

A

People needing to cover for one off events which aren’t covered by other policies.
Especially for self-employed people.

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6
Q

What does PMI do?

A

Covers against costs of private medical care

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7
Q

What type of illness is PMI designed for?

A

Acute rather than chronic

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8
Q

What illness must firms provide distinct examples of their approach to treatment for under ABI guidance?

A

Cancer (which most policies will not pay for).

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9
Q

What are the limitations on basic PMI?

A
  • No cover for chronic illnesses
  • No extra benefits only covers costs
  • Cover often limited
  • Often the insured must cover the first part of costs
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10
Q

What is one of the benefits offered under a standard PMI plan?

A
  • Wider choice of hospitals
  • Longer claim periods
  • Higher limits
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11
Q

What are the extra benefits on a comprehensive PMI plan?

A
  • Fullest cover
  • Longer claim periods
  • Cover cost of a parent staying with a child
  • May include alternative medicine, dental treatment, travel abroad and cash payments for NHS overnight stays.
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12
Q

What is a moratorium?

A

Medical conditions present within a number of years or the start of cover will be excluded for first few years of the policy but removes need for full medical underwriting.

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13
Q

How does a claim for PMI begin?

A

Referral from GP

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14
Q

How are PMI payments taxed?

A

PMI

  • Tax free and no tax relief for premiums for individuals
  • Group - if employer pays, they are subject to income tax as benefit in kind. Subject to employer’s NICs. Deductible as a business expense.
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15
Q

What is MPPI?

A

Protection against not being able to pay mortgage due to accident, sickness or unemployment.

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16
Q

How long are MPPI benefits usually payable for?

A

12, 18 or 24 months

17
Q

How long is the deferred payment in MPPI?

A

30 or 60 days

18
Q

How could a self-employed person claim on MPPI?

A

If business goes into involuntary liquidation

19
Q

What are the usual 4 eligibility criteria for MPPI?

A
  1. Mortgages of main residence
  2. Permanent residents in U.K.
  3. Under 65
  4. Employed or self-employed
20
Q

How is ASU benefit paid?

A

Monthly or weekly if unab,e to work due to accident sickness or unemployment

21
Q

What is the max length of time ASU benefit will be paid?

A

2 years

22
Q

How is group ASU limited?

A

To incidents occuring at work

23
Q

How do Health Cash Plans work?

A

Health Cash Plans pay up to 100% of cost of treatment up to annual limit
May also pay a set amount a day for a hospital stay.

24
Q

How is PPI cover normally restricted?

A

To minimum payment for 12 months

25
Q

When can PPI now be sold in relation to a loan?

A

Only after 7 days of loan sale or at point where a personalised illustration is provided

26
Q

What are the 12 factors shaping a clients needs?

A
  1. Age
  2. Marital status
  3. Dependents
  4. Wills
  5. Health
  6. Occupation
  7. Hobbies
  8. Income
  9. Expenditure
  10. Liabilities
  11. Benefits
  12. Existing policies
27
Q

What are the 5 steps in the life assurance planning process?

A
  1. Identify general need
  2. Quantify amount of capital and income needed
  3. Determine how long cover for each need is required
  4. Take into account existing policies
  5. Recommend appropriate types of policy
28
Q

How is MPPI taxed?

A

No tax relief and no tax on benefits

29
Q

How is ASU taxed?

A

Individuals - no tax relief and benefits not taxed.

Group - Taxed as benefit in kind under income tax under PAYE. Allowable as business expense.

Cii - RO5 Financial Protection 2020/21 (11 decks)

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