Unit 5:18 Protection Revisited

Question 1

Rider Benefits

Answer 1

1. Rider Benefits are optional extras added to insurance policies for additional coverage
2. Waiver of Premium (WoP) is highlighted, which:
   
   • Covers your policy payments if you can’t work due to illness/disability
   • Typically increases premiums by 4-6%
   • May only cover one person in joint-life policies
   • Provides valuable protection during periods of disability

Question 2

Additional Policy Benefits & Options

Answer 2

• Terminal Illness Cover: Fast-tracks death benefit pay-out for serious illness with short life expectancy
• Accidental Death Benefit: Pays multiple of sum assured if death occurs due to accident
• Total and Permanent Disability Cover: Provides accelerated death benefit if permanently unable to work
• Guaranteed Insurability Options: Allows increased coverage without medical checks at key life events
• Life Changes Benefit: Permits sum assured increases at major life events (marriage, home purchase, childbirth)
• Replacement Benefit: Enables remaining policyholder to start new single policy after joint policyholder’s death
• Separation Benefit: Splits joint policy into two single policies following relationship breakdown

Question 3

Employment Protection Schemes

Answer 3

• Employer Protection Schemes offered as part of employee benefits package
• Provides group protection coverage for employees
• Companies can offset costs against (corporation) tax liability
• Coverage varies between employers
• Not all employers cover the full cost of protection

Question 4

Buildings and Contents Insurance

Answer 4

• Buildings and Contents Insurance required by mortgage lenders
• Lenders insist on buildings insurance to protect their security (the property)
• Covers the structure and permanent fixtures of the property

Question 5

Buildings Insurance Exclusions

Answer 5

• Damage caused by escape of water or oil when the property is unfurnished
• Damage to gates, fences and hedges caused by falling trees and branches
• Theft or attempted theft if property was left unoccupied and windows/doors not fully secured
• Damage to heating system caused by rusting, corrosion or wear and tear

Question 6

Self Build Insurance

Answer 6

• Self Build Insurance essential for those constructing their own home
• Site Insurance covers works in progress and protects materials from mishaps
• Ten-Year Structural Warranty covers major damage due to design flaws/workmanship
• Liability Cover protects against risks to public (£5 million) and workers (£10 million)
• Employer’s Liability Insurance handles compensation if workers are injured on site

Question 7

Contents Insurance

Answer 7

• Contents insurance covers personal effects, household fittings, and furniture
• Protects belongings from theft and damage
• Separate from buildings insurance which covers the structure
• If house is furnished before you move in, it us up to you and landlord to get contents insurance
• if unfurnished it is up to borrower to ensure the contents they will buy

Question 8

Landlord Insurance

Answer 8

• Landlords insurance combines buildings cover with specialized protection for rental property risks
• Includes liability coverage for tenant injury claims and property damage
• Can cover loss of rental income if property becomes uninhabitable after insured event
• Buy-to-let mortgage lenders typically require suitable insurance as a condition of lending

Question 9

Landlord Insurance Options

Answer 9

• Landlord’s Building Insurance covers standard protection plus extras like accidental damage
• Includes additional coverage such as legal protection and rent guarantee insurance
• Protects the physical structure and fixtures of the rental property
• Landlord’s Contents Insurance available specifically for furnished rental properties

Question 10

Accident, Sickness and Unemployment (ASU) Cover

Answer 10

• Pays out for max 2 years
• Covers inability to work due to accident, sickness, or involuntary unemployment
• Deals with probabilities rather than certainty like life insurance
• May need to claim once, multiple times, or not at all
• Policies typically renewable annually with premium adjustments based on claims history
• Exclusions are getting fired or resigning

Question 11

Personal Accident Insurance

Answer 11

• Pays lump sum rather than monthly payments if involved in a covered accident
• Provides financial support for accidental death or injury
• Available as group policies for workplace employees

Question 12

Payment Protection Insurance (PPI)

Answer 12

• Includes waiting period (typically 30-60 days) before benefits begin after claim
• Benefit payment duration varies by policy (typically between 12-24 months)

Question 13

Mortgage Payment Protection Insurance (MPPI)

Answer 13

• Will pay your mortgage for up to 2 years if unable to work due to illness or injury
• Available for people between 18-65 years old, typically without medical questionnaires
• Includes brief waiting period (28-30 days) before benefits begin

Question 14

Usual Waiver of Premium deferral period for Insurance policies

Answer 14

• 13 weeks

Question 15

CPD requirements for Life Assurance advisers

Answer 15

• 35 Hours P/A