TOPIC 17 Flashcards
Which UK state benefit is replacing various others?
Universal Credit.
Employment and Support Allowance.
Personal Independence Payment.
Universal Credit.
Housing Benefit is means tested. True or false?
True False
True
SMI (support mortgage payment) is paid as a:
benefit.
loan.
gift.
loan.
Mortgage protection assurance is the most common use of which type of term assurance?
Level term assurance.
Decreasing term assurance.
Convertible term assurance.
Decreasing term assurance.
When exercising the convert option on convertible term assurance, the new sum assured:
cannot exceed the original sum assured.
must be equal to the original sum assured.
can exceed the original sum assured.
cannot exceed the original sum assured.
Which core conditions are generally always covered by a CIC policy? Select all that apply.
a) All forms of cancer.
b) Heart attack of any severity.
c) Stroke resulting in permanent symptoms.
d) Heart attack of specified severity.
e) Most forms of cancer.
c) Stroke resulting in permanent symptoms.
d) Heart attack of specified severity.
e) Most forms of cancer.
When deciding whether to change a reviewable CIC or IPI premium, the insurer cannot consider claims experience. True or false?
True False
False
For which of the following traditional exclusions did the ABI revise its CIC guidance in 2018?
a) Self-inflicted injury.
b) Participation in certain high-risk pastimes.
c) HIV not resulting from a blood transfusion, an assault or a work accident.
c) HIV not resulting from a blood transfusion, an assault or a work accident.
A payout from a CIC plan can only be triggered if the insured takes a specified minimum amount of time off work. True or false?
True False
False
IPI benefits cease on the earliest of recovery and end of policy term, death or what:
redundancy.
retirement.
subrogation.
retirement.
PIP is usually payable where the person has had difficulties with daily living or mobility for ______ months, and expects their difficulties to continue for at least another ______ months.
Three months and nine months.
Three months and six months.
Three months and three months.
Three months and nine months.
PIP is usually payable where the person has had difficulties with daily living or mobility for three months, and expects their difficulties to continue for at least another nine months.
A person who qualifies for Attendance Allowance and needs help both by day and night would receive the:
lower rate.
higher rate.
standard rate – there is only one rate.
higher rate.
There are two levels of benefit for Attendance Allowance: a lower rate for people who need help with personal care by day or at night, and a higher rate for those who need help both by day and at night.
SMI payments are calculated using:
the borrower’s actual mortgage interest rate.
the Sonia index.
a standard rate of interest.
a standard rate of interest.
Assignment of life policies remains normal practice among lenders. True or false?
True False
False
Level term assurance is most appropriate to cover repayment of which of the following products?
Repayment mortgage.
Interest-only mortgage.
Credit card.
Interest-only mortgage.
Level term assurance is often used when a fixed amount would be needed on death to repay a constant fixed‑term debt, such as an interest‑only mortgage.
With mortgage protection assurance, the sum assured:
increases by lesser monthly amounts near the start and by larger amounts towards the end of the term.
decreases by larger monthly amounts near the start and by lesser amounts towards the end of the term.
decreases by lesser monthly amounts near the start and by larger amounts towards the end of the term.
decreases by lesser monthly amounts near the start and by larger amounts towards the end of the term.
Pension term insurance cannot extend beyond the individual’s:
55th birthday.
65th birthday.
75th birthday.
75th birthday.
And cannot be held in joint names or assigned to a lender.
Which of the following whole-of-life contracts may be suitable where both lifetime cover and an increasing benefit are required?
With-profit.
Unit-linked.
Non-profit.
Unit‑linked is suitable where both lifetime cover and an increasing benefit are required. Some of the money is used to buy the life assurance while the rest is invested. However, whole‑of‑life is primarily a protection policy, so more speculative funds should generally be avoided.
CIC commonly, but not always, covers aorta graft surgery. True or false?
True False
True
With which type of CIC does the cover amount change each month in line with a repayment loan?
Level cover.
Decreasing cover.
Increasing cover.
Decreasing cover.
Convertible term:
a) Limited term
b) Can be investment linked
c) Conversion to whole of life or endowment
d) Level sum assured
e) Sum assured decreases in line with mortgage
a) Limited term
c) Conversion to whole of life or endowment
d) Level sum assured
Whole of life :
a) Limited term
b) Can be investment linked
c) Conversion to whole of life or endowment
d) Level sum assured
e) Sum assured decreases in line with mortgage
b) Can be investment linked
d) Level sum assured (usually)
Level term:
a) Limited term
b) Can be investment linked
c) Conversion to whole of life or endowment
d) Level sum assured
e) Sum assured decreases in line with mortgage
a) Limited term
d) Level sum assured
Decreasing term :
a) Limited term
b) Can be investment linked
c) Conversion to whole of life or endowment
d) Level sum assured
e) Sum assured decreases in line with mortgage
a) Limited term
e) Sum assured decreases in line with mortgage
Order of cost (most expensive first)
a) Convertible
b) Level term
c) whole of life
d) decreasing term
c) whole of life
a) Convertible
b) Level term
d) decreasing term
