Free CeMAP 1 Quiz Test Unit 1 Topic 11

Unit 1 Topic 11

1 / 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?

Accident and sickness

Private Medical

Critical Illness

Income Protection

2 / 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

Long-term care

Permanent health

Critical illness

3 / 18

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

ASU does not have a deferred payment period

ASU provides total protection for all income

ASU provides short-term cover only

ASU provides for other employment scenarios not just redundancy

4 / 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?

Critical illness cover

Income Protection

Whole of life plan

MPPI

5 / 18

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

7 years

1 year

2 years

5 years

6 / 18

The MAIN benefit of increasing term assurance is that it:

offers the possibility of a terminal bonus on death

provides a hedge against inflation

qualifies for life assurance premium relief

guarantees cover for the whole of the policyholder’s life

7 / 18

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

Riot or civil commotion

Accidental damage

Civil war or insurrection

Third party liability

8 / 18

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

At the end of the plan term

After 10 years

Upon the death of the recipient

State pension age

9 / 18

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

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.

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

10 / 18

Benefits from a critical illness policy are usually payable as

a lump sum to the policyholder.

a lump sum to the policyholder’s estate.

regular income to the policyholder.

regular income to the policyholder’s dependents.

11 / 18

What type of assurance is a family income benefit plan?

Endowment

Whole-of-life

Level term

Decreasing term

12 / 18

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

Within the plan fee

As a direct deduction from the monthly premium

By cancellation of units

Via the bid offer spread

13 / 18

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

As a way of including other forms of protection policy

As a protection plan with some allowance for savings

Primarily as a savings vehicle

As a protection plan only

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?

Flexible

With-profit

Unitlinked

Universal

15 / 18

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

Kidney failure

Stroke

Heart attack

Skin cancer

16 / 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

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

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

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

17 / 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

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

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

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

18 / 18

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

Savings

Investment

Retirement planning

Protection

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