Protection Flashcards
Insurance vs Assurance?
Might vs Will
Term 100 policy?
Obscure, term to 100 policy.
Return of premium insurance?
Essentially term assurance + Endowment. Expensive.
‘Relevant’ Life Policy + Benefit? Conditions?
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.
WoL Policies for?
Funeral Expenses
IHT Planning
WoL policy works how? How is fund admin paid?
High premiums in early years build a pot, relieving later years. Allow stable premiums.
Buy/Offer price + Sell/Bid price difference = bid/offer spread.
Minimum cover?
Minimum level to meet qualifying rules. Essentially a savings plan.
Maximum cover?
Premium set at outset to provide maximum cover, reviewed 10yrly.
Balanced cover?
Premiums set to be maintained through life w/o increase, providing ‘reasonable’ return.
Holloway policies? Exempt from? Offered by? Makes them?
IP bought by self employed. Retail Distribution Review (RDR). Friendly societies. Tax exempt.
Premium Basis?
Guaranteed: Set up-front. Will not change.
Reviewable: start low, may increase as per insurers book.
Waiver of premium?
Premiums not due when paying out a claim.
UK IP policies and foreign travel?
‘Geographical free limits’: countries insurer will accept claims from: USA,Australia, NZ, Canada. Else claim could be limited, or, insist they return.
Proportionate benefit? Rehabilitation benefit?
Make up difference between lower level work/pay and pre-incapacity. Rehab goes back to same work, but on different terms.
‘Free cover’ means?
No underwriting required.
Group policies taxation? Means?
Allowable expense in calculating CT. Benefits received as taxable trading expense, allowable expense with IT/NIC as normal. Often higher sum assured (75%).
IP maximum benefits generally?
% of earnings - Basic ESA.
Types of CIC?
Standalone
Life + CIC: on a ‘first claim’ basis. Usually with term assurance.
Split trust?
CIC outside trust, Death benefits within trust.
Genetic testing and insurance?
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.
‘Life buy-back’?
Re-instating life cover after CIC claim.
Tax of individual cover?
Group: tax-free benefit paid to employee.
- If employer pays premium: BiK + IT’d.
Renewable term insurance?
Option to renew for further term, without underwriting. Therefore expensive.
If unemployed, IP basis assed on?
ADLs
