Free CeMAP 1 Quiz Test Unit 1 Topic 11

Unit 1 Topic 11

1 / 18

Which one of the following illnesses would NOT normally result in benefits being paid out from a critical illness policy?

Stroke

Skin cancer

Heart attack

Kidney failure

2 / 18

Matthew has been given various pieces of information regarding critical illness insurance. Which of the following is correct?

Premiums on a CIC plan attract tax relief at the policyholder’s highest marginal rate

The lump sum benefit received under critical illness insurance is free from all UK taxes

The monthly benefit received from a critical illness policy is taxed as income

Monthly benefit under a critical illness plan is limited to 60% of the policyholder’s pre-disability monthly income

3 / 18

The MAIN benefit of increasing term assurance is that it:

qualifies for life assurance premium relief

provides a hedge against inflation

guarantees cover for the whole of the policyholder’s life

offers the possibility of a terminal bonus on death

4 / 18

When will benefit payments under a family income benefit plan stop?

After 10 years

At the end of the plan term

State pension age

Upon the death of the recipient

5 / 18

Benefits from a critical illness policy are usually payable as

a lump sum to the policyholder.

regular income to the policyholder’s dependents.

a lump sum to the policyholder’s estate.

regular income to the policyholder.

6 / 18

Julian wishes to make sure that he can meet all of his essential outgoings if he is unable to work due to medium- or long-term illness. Which of the following insurance products would be most suitable?

Private Medical

Critical Illness

Income Protection

Accident and sickness

7 / 18

Flexible whole of life policies are best suited to which of the following scenarios?

Primarily as a savings vehicle

As a protection plan only

As a way of including other forms of protection policy

As a protection plan with some allowance for savings

8 / 18

Christopher is employed in an occupation that requires him to be fully active and physically fit. He is concerned that he will 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?

Income Protection

Whole of life plan

MPPI

Critical illness cover

9 / 18

What is the principal purpose of whole-of-life plans?

Savings

Investment

Retirement planning

Protection

10 / 18

What is the main difference between accident sickness and unemployment (ASU) policies and income protection insurance policies?

ASU provides total protection for all income

ASU does not have a deferred payment period

ASU provides short-term cover only

ASU provides for other employment scenarios not just redundancy

11 / 18

What is usually the MAXIMUM benefit payment period for accident, sickness and unemployment (ASU) policies?

7 years

1 year

2 years

5 years

12 / 18

How is life cover paid for on a flexible whole-of-life assurance?

As a direct deduction from the monthly premium

Within the plan fee

Via the bid offer spread

By cancellation of units

13 / 18

For which one of the following situations might a joint whole-of-life policy be the most suitable recommendation?

Bernard and Rita, a newly married couple seeking a mortgage

Ken and Sheila, a recently retired couple, wish to provide a tax-free legacy

Vince and Lucy, a married couple requiring a lump sum for their old age

Simon and Lois, a middle-aged couple who wish to maximise their savings

14 / 18

Stewart wants to start a whole-of-life assurance, which will also provide critical illness cover. Which specific type of plan should he choose?

Universal

Flexible

With-profit

Unitlinked

15 / 18

What type of assurance is a family income benefit plan?

Decreasing term

Whole-of-life

Endowment

Level term

16 / 18

What type of insurance policy can provide a daily rate of income if treatment involving an overnight stay in an NHS hospital is involved?

Private medical

Critical illness

Long-term care

Permanent health

17 / 18

Which of the following is normally regarded as a standard peril in the majority of buildings insurance policies?

Accidental damage

Riot or civil commotion

Third party liability

Civil war or insurrection

18 / 18

Which of the following statements is true in relation to either income protection insurance or critical illness cover?

There is no limit to the level of benefit that can be arranged under an income protection plan.

Critical illness cover provides a taxable lump sum on diagnosis of a prescribed illness.

There is no limit to the number of claims that can be made on an income protection insurance policy provided premiums are paid up to date.

Premiums on a critical illness policy qualify for tax relief for retired policyholders.

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