Unit 5 Topic 18 Flashcards
Which of the following is most likely to be an exclusion on a buildings
insurance policy?
A damage cause by attempted theft
B damage to a heating system caused by corrosion
C damage to a roof caused by a falling tree
D damage to a TV aerial caused by a storm
B damage to a heating system caused by corrosion
Liesel has not died, but has received a payout from her term assurance policy.
This is most likely to be because:
A her life expectancy is less than 12 months
B her policy included a guaranteed insurability option
C she has contracted a long term illness that has limited her ability to
work
D the policy has reached the end of its term
A her life expectancy is less than 12 months
What deferred period if any typically applies to payment protection insurance? A up to 60 days B 3 months C 6 months D None
A up to 60 days
When Adam started his decreasing term assurance plan to protect his mortgage,
what factor made the waiver of premium option particularly attractive?
A he has an interest only mortgage
B he is self employed
C he is worried about redundancy
D his mortgage repayment vehicle is a stocks and shares ISA
B he is self employed
Which of the following is true in relation to buildings insurance on a lease hold
apartment?
A Either the freeholder or the lender can insist on the leaseholder arranging a
specific building and contents insurance policy
B The leaseholder has the right to choose an appropriate insurance policy,
subject to the lender’s approval
C The lender can insist on the use of a specific insurer and policy
D The freeholder’s right to select a building insurance policy overrides the
rights of the lender.
D The freeholder’s right to select a building insurance policy overrides the
rights of the lender.
Typically, terminal illness benefit is payable under a life assurance policy, where
a person has a life expectancy of what maximum period ?
A 3 months
B 6 months
C 9 months
D 12 months
D 12 months
What part, if any, of the benefits payable under a mortgage payment protection
insurance (MPPI) policy is subject to tax?
A all benefits received
B any income that exceeds the mortgage payment
C any lump sum paid
D None
D None
A guaranteed insurability option under a life assurance policy will most likely be
available:
A at a set point in the plan’s term
B on reaching state retirement age
C when the policy is made paid up
D when the policy is assigned to a lender
A at a set point in the plan’s term
Income benefits under ASU policies payable for a maximum of: A 3 to 6 months B 1 to 2 years C 3 to 5 years D 10 to 25 years
B 1 to 2 years
Which of the following is normally regarded as a standard peril in the majority of buildings insurance policies? A Accidental damage B Third party liability C Riot or civil commotion D Civil war or insurrection
C Riot or civil commotion
Which of the following describes the principle of averaging?
A A way of reducing the incidence of multiple claims.
B A method of ensuring that a claimant’s financial position is the same before
and after an insurance claim.
C A procedure for reducing the settlement figure payable to a policyholder who
is under-insured.
D A means of ensuring that policyholders are not over-insured.
C A procedure for reducing the settlement figure payable to a policyholder who
is under-insured.
Most buildings insurance policies automatically provide cover for:
A corrosion to a heating system.
B subsidence and landslip.
C theft while the property is unoccupied.
D trees falling on fences and hedges.
B subsidence and landslip.
An insurer indicates that because of local subsidence, an insurance policy on a
property offered as security to a lender would have exclusions for subsidence.
Which course of action is the lender MOST likely to follow?
A Proceed with the loan on the basis of the policy exclusion.
B Leave it to the borrower to decide what to do.
C Withdraw the offer of a loan.
D Pay the additional premium on behalf of the borrower.
C Withdraw the offer of a loan.
A lender discovers that a borrower has allowed the property insurance on his
mortgaged property to lapse. What steps will the lender normally take when that
happens?
A Call in the mortgage as the terms and conditions have been breached.
B Switch cover to the lender’s block policy scheme and pay the premium out of
reserves.
C Pay the premium and charge it to the mortgage account.
D Allow the borrower a short period, typically three months, to re-instate the
cover.
C Pay the premium and charge it to the mortgage account
