Free CeMAP 1 Quiz Test Unit 1 Topic 11

Unit 1 Topic 11

1 / 18

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

Savings

Protection

Retirement planning

Investment

2 / 18

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

ASU provides for other employment scenarios not just redundancy

ASU provides total protection for all income

ASU does not have a deferred payment period

ASU provides short-term cover only

3 / 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

With-profit

Flexible

Unitlinked

4 / 18

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

Primarily as a savings vehicle

As a way of including other forms of protection policy

As a protection plan with some allowance for savings

As a protection plan only

5 / 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?

Whole of life plan

Critical illness cover

Income Protection

MPPI

6 / 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

Permanent health

Long-term care

7 / 18

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

By cancellation of units

As a direct deduction from the monthly premium

Via the bid offer spread

Within the plan fee

8 / 18

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

At the end of the plan term

Upon the death of the recipient

State pension age

After 10 years

9 / 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

Civil war or insurrection

Third party liability

10 / 18

What type of assurance is a family income benefit plan?

Decreasing term

Endowment

Level term

Whole-of-life

11 / 18

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

5 years

7 years

1 year

2 years

12 / 18

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

Stroke

Kidney failure

Heart attack

Skin cancer

13 / 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.

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.

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

14 / 18

The MAIN benefit of increasing term assurance is that it:

qualifies for life assurance premium relief

guarantees cover for the whole of the policyholder’s life

provides a hedge against inflation

offers the possibility of a terminal bonus on death

15 / 18

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

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

Bernard and Rita, a newly married couple seeking a mortgage

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

16 / 18

Benefits from a critical illness policy are usually payable as

regular income to the policyholder’s dependents.

regular income to the policyholder.

a lump sum to the policyholder’s estate.

a lump sum to the policyholder.

17 / 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

Income Protection

Critical Illness

18 / 18

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

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

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

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