Topic 19 - Protection Advice Flashcards
Whole-of-life assurance is a pure protection product. True or false?
False
When determining a person’s budget for protection, the adviser should use as a maximum:
a proportion of the person’s current disposable income.
a proportion of the person’s future disposable income.
all of the person’s current disposable income.
a proportion of the person’s current disposable income.
Which whole‑of‑life plans meet a variety of protection needs within one plan?
Joint life.
Mortgage-related.
Universal.
Universal
If a couple separates and the parties want to sever all financial ties, a joint-life policy is still appropriate. True or false?
False
Under ICOBS 5 suitability requirements, a firm must inform the customer if it finds that:
they have made a misrepresentation.
documents have been provided in a durable medium.
parts of the cover do not apply.
parts of the cover do not apply.
Which remedy may be available to the insurer if a customer makes a careless misrepresentation?
Refuse all claims but return the premiums.
None: the insurer must pay any claim.
Treat the contract as if it never existed.
Refuse all claims but return the premiums.
Which section of ICOBS states that firms must take reasonable steps to ensure the suitability of advice to any customer who is entitled to rely on their judgement?
ICOBS 5.
ICOBS 6.
ICOBS 7.
ICOBS 5.
Consumers’ main duty of disclosure when entering into, or renewing, an insurance contract is:
utmost good faith.
fair representation.
disclosure of all material facts.
fair representation.
Which piece of documentation is normally issued when the recommendations are presented to the customer?
KFD
If some savings are reallocated to meet costs arising on death or illness, the client may wish to make additional protection provision. True or false?
True
Relevant CPD can contribute to the FCA’s training requirements under ICOBS. True or false?
False - All those involved in the distribution of insurance products possess appropriate knowledge and ability to perform their duties. As part of this, individuals complete a certain amount of relevant CPD per year.
The duty to take reasonable care not to make a misrepresentation is known as:
utmost good faith.
material facts.
fair representation.
Fair representation in insurance replaced the duty for consumers to disclose all material facts.
A protection applicant makes a statement they think is true, but they do not check. The statement proves to be false. Which type of misrepresentation is this?
Reckless misrepresentation.
Careless misrepresentation.
Deliberate misrepresentation.
Careless misrepresentation - Careless misrepresentation is where the consumer makes a statement they believe to be true but without sufficient care to check the facts.
The cooling-off period for life assurance, CIC or IPI is generally:
14 days.
20 days.
30 days.
30 days. - The cooling-off period is generally 30 days for life assurance, CIC or IPI, and 14 days for home insurance.
Existing cover should be cancelled before the replacement cover is in force. True or false?
False - Existing cover should never be cancelled until the replacement cover is in force – to cancel before confirmation could expose the customer to risk.
