U5: T19 - PROTECTION ADVICE Flashcards
The rules for providing advice and sales of ‘pure protection’ vehicles are contained?
Insurance: Conduct of Business sourcebook (ICOBS):
Define ‘Pure Protection’.
A pure protection product provides protection against one or more perils but does not contain an investment element.
Is ‘Whole of Life’ assurance a form of pure protection?
No, because whole-of-life is investment linked
Define Utmost Good Faith
Utmost good faith required both applicant and insurer to disclose accurately, honestly and completely any information (ie material facts) that might influence the other party’s decision to enter into the contract.
Why did the Consumer Insurance Disclosure and Representations Act 2012 remove the ‘Utmost Good Faith’ principle?
This put too much onus on the consumer to disclose factors they may not have realised were relevant.
The Insurance Act 2015 covers consumers or non-consumers?
Non-consumers.
Similar to the consumer insurance act 2012 - it covers insurance contracts for business purposes.
In the instance of claims due to reckless and deliberate misrepresentation what happens to:
1) The contract
2) The claim
3) The premiums
1) Treat the contract as if it never existed
2) Refuse all claims
3) Retain all premiums paid, unless this would be unfair
In the instance of claims due to careless misrepresentation what happens to:
1) The contract
2) The claim
3) The premiums
If the insurer would NOT have entered into the contract if it knew the information, all claims can be refused but premiums must be returned
If the insurer WOULD have entered into the contract on different terms (eg at a lower level of cover) the different terms are taken as applying to the contract
If a higher premium would have been charged, the insurer can make a proportionate reduction to the amount of any claim
In the instance of claims due to honest and reasonable misrepresentation what happens to:
1) The contract
2) The claim
3) The premiums
None: the insurer must pay any claim
For a pure protection policy, what can be provided in stead of a Key Features Document (KFD)?
Policy Summary
Which of the following have a cooling off period of 14 days?
A) Life Assurance
B) Home Insurance
C) CIC
D) IPI
B) Home Insurance
Which of the following have a cooling off period of 30 days?
A) Life Assurance
B) Home Insurance
C) CIC
D) IPI
A) Life Assurance
C) CIC
D) IPI
If the same level and terms of cover can now be obtained at a reduced cost, is it acceptable to recommend a cancellation and replacement of an existing policy?
Yes, if it can be shown conclusively
If a more appropriate plan (possibly with better cover) can be obtained at a similar cost, is it acceptable to recommend a cancellation and replacement of an existing policy?
Yes, if it can be shown conclusively
Which of the following will allow debt repayment?
A) CIC
B) IPI
A) CIC
Which of the following will service debt?
A) CIC
B) IPI
B) IPI
A joint-life plan is cheaper than two single-life plans. True or false
True
Protection is cheaper the shorter the term of the plan. True or false
True