Protection

Question 1

Insurance vs Assurance?

Answer 1

Might vs Will

Question 2

Term 100 policy?

Answer 2

Obscure, term to 100 policy.

Question 3

Return of premium insurance?

Answer 3

Essentially term assurance + Endowment. Expensive.

Question 4

‘Relevant’ Life Policy + Benefit? Conditions?

Answer 4

Set up by Employer, for employee. Expense for Employer, not BiK for employee.
Death <75 –> Sum of capital paid.
No surrender value.
Paid to life insured, or, nomination.

Question 5

WoL Policies for?

Answer 5

Funeral Expenses
IHT Planning

Question 6

WoL policy works how? How is fund admin paid?

Answer 6

High premiums in early years build a pot, relieving later years. Allow stable premiums.
Buy/Offer price + Sell/Bid price difference = bid/offer spread.

Question 7

Minimum cover?

Answer 7

Minimum level to meet qualifying rules. Essentially a savings plan.

Question 8

Maximum cover?

Answer 8

Premium set at outset to provide maximum cover, reviewed 10yrly.

Question 9

Balanced cover?

Answer 9

Premiums set to be maintained through life w/o increase, providing ‘reasonable’ return.

Question 10

Holloway policies? Exempt from? Offered by? Makes them?

Answer 10

IP bought by self employed. Retail Distribution Review (RDR). Friendly societies. Tax exempt.

Question 11

Premium Basis?

Answer 11

Guaranteed: Set up-front. Will not change.
Reviewable: start low, may increase as per insurers book.

Question 12

Waiver of premium?

Answer 12

Premiums not due when paying out a claim.

Question 13

UK IP policies and foreign travel?

Answer 13

‘Geographical free limits’: countries insurer will accept claims from: USA,Australia, NZ, Canada. Else claim could be limited, or, insist they return.

Question 14

Proportionate benefit? Rehabilitation benefit?

Answer 14

Make up difference between lower level work/pay and pre-incapacity. Rehab goes back to same work, but on different terms.

Question 15

‘Free cover’ means?

Answer 15

No underwriting required.

Question 16

Group policies taxation? Means?

Answer 16

Allowable expense in calculating CT. Benefits received as taxable trading expense, allowable expense with IT/NIC as normal. Often higher sum assured (75%).

Question 17

IP maximum benefits generally?

Answer 17

% of earnings - Basic ESA.

Question 18

Types of CIC?

Answer 18

Standalone
Life + CIC: on a ‘first claim’ basis. Usually with term assurance.

Question 19

Split trust?

Answer 19

CIC outside trust, Death benefits within trust.

Question 20

Genetic testing and insurance?

Answer 20

Not asked to take, nor reveal results if taken when policy in force. Don’t need to reveal as part of research. Dont need to reveal if <£500k LA, <£300k CIC, <£30k/yr IP.

Question 21

‘Life buy-back’?

Answer 21

Re-instating life cover after CIC claim.

Question 22

Tax of individual cover?

Answer 22

Group: tax-free benefit paid to employee.
- If employer pays premium: BiK + IT’d.

Question 23

Renewable term insurance?

Answer 23

Option to renew for further term, without underwriting. Therefore expensive.

Question 24

If unemployed, IP basis assed on?

Answer 24

ADLs

Question 25

If wanting to pay school fees, unsure if may have further children, what type?

Answer 25

Renewable Term Insurance

Question 26

Critical illness with accelerated death benefit will?

Answer 26

Pay on first of CI/death.

Question 27

Who pays for medical evidence for insurance claims?

Answer 27

Person claiming.

Question 28

Moratorium is?

Answer 28

Temporary suspension awaiting further review.

Question 29

Types of PMI?

Answer 29

Budget
Standard
Comprehensive