Topic 17 Flashcards
What is the purpose of a convertible term assurance plan?
To:
a. allow it to be converted to a joint-life plan at some point during the policy.
b. allow the original policy term to be converted without any increased premiums.
c. enable the original sum assured to increase within specified limits without any evidence of health.
d. enable the planholder to convert it to a whole-of-life policy during the term without any further evidence of health.
d. enable the planholder to convert it to a whole-of-life policy during the term without any further evidence of health.
Christopher is employed in an occupation that requires him to be fully active and physically fit. He is concerned that he would not be able to maintain his new mortgage if he were to suffer an illness that might force him to take lower-paid employment.
Which of the following products would provide him with a long-term income in such an event?
a. Accident, sickness and unemployment insurance.
b. Critical illness cover.
c. Income protection insurance.
d. Whole-of-life assurance.
c. Income protection insurance.
Matthew has been given various pieces of information regarding a standalone critical illness policy.
Which of the following is true?
a. It would pay the benefits immediately on diagnosis of any serious illness.
b. Matthew may have to repay some of the benefits if he recovers after making a claim.
c. Matthew would have to survive for up to 28 days after diagnosis for benefits to be paid.
d. The plan will allow multiple claims for the original benefit.
c. Matthew would have to survive for up to 28 days after diagnosis for benefits to be paid.
Which of the following medical problems would not be a core condition under the ABI’s Guide to Minimum Standards for critical illness cover, assuming all of the medical problems meet the specified criteria on diagnosis?
a. Cancer.
b. Heart attack.
c. Kidney failure.
d. Stroke.
c. Kidney failure.
Statutory Sick Pay payments are subject to which of the following potential deductions, if any?
a. Both income tax and National Insurance.
b. Income tax only.
c. National Insurance only.
d. None.
a. Both income tax and National Insurance.
David has previously benefited from Support for Mortgage Interest (SMI) loan payments, which ceased when he found a new job.
If he loses his job again and makes a new claim for SMI, he will not be subject to a waiting period provided that his previous SMI claim:
a. ceased within the last 52 weeks.
b. ceased more than 52 weeks ago.
c. was for fewer than 26 weeks.
d. was for more than 26 weeks.
a. ceased within the last 52 weeks.
A person is not eligible to receive Universal Credit if their household savings exceed:
a. £3,600.
b. £9,000.
c. £10,000.
d. £16,000.
d. £16,000.
Personal Independence Payment (PIP) is payable to a person who has had difficulties with daily living or mobility for a minimum of the previous:
a. one month.
b. three months.
c. six months.
d. nine months.
b. three months.
Income protection insurance is available as a standalone policy in which of the following forms?
a. Pure protection plan or unit-linked basis.
b. Pure protection plan or with-profits.
c. Unitised or collective basis.
d. With-profits or unit-linked basis.
a. Pure protection plan or unit-linked basis.
How long is the typical survival period under a standalone critical illness insurance policy?
a. 7 to 10 days.
b. 14 to 28 days.
c. 30 to 60 days.
d. 90 to 365 days.
b. 14 to 28 days.
Which type of critical illness policy is the most suitable to be used to cover a repayment mortgage?
a. Decreasing cover.
b. Increasing cover.
c. Level cover.
d. Renewable cover.
a. Decreasing cover.
Why might a customer prefer to take out an income protection insurance (IPI) policy rather than an accident, sickness and unemployment (ASU) policy?
a. To cover a long-term need.
b. To reduce their premiums.
c. They have an existing medical condition.
d. They require a lump sum in the event of a claim.
a. To cover a long-term need.
Which of the following statements is typically true in relation to income protection insurance and critical illness cover?
a. Critical illness cover provides a taxable lump sum on diagnosis of a defined illness.
b. Critical illness policies provide income benefits only.
c. There is no limit to the level of benefit that can be arranged under an income protection insurance plan.
d. There is no limit to the number of claims that can be made on an income protection insurance policy, provided that premiums are paid up to date.
d. There is no limit to the number of claims that can be made on an income protection insurance policy, provided that premiums are paid up to date.
Why might a customer prefer to take out an income protection insurance policy rather than a critical illness policy?
They have reached state retirement age.
They are unemployed.
To provide a regular income if unable to work due to illness or accident.
To receive a lump sum.
To provide a regular income if unable to work due to illness or accident.
