Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CII - R05 Financial Protection > Chapter 4- Life Assurance > Flashcards

Chapter 4- Life Assurance Flashcards

1
Q

Does WOL usually have a surrender value

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is unit linked WOL

A

A mix of life assurance and investment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

How does unit linked WOL work

A

The level of cover determines the scope for value growth. Premiums are set on an assumed investment return, allocated as units and cancelled each month to cover the life over

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

How often are unit linked WOL policies usually reviewed

A

Every 10 years

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is the difference between a max cover unit linked WOL and a standard cover WOL

A

Max cover have set premiums for 5-10 years then increase with age, but standard cover set the premium so it needn’t increase if the investment performs as expected

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is a bond

A

An insurance contract designed specifically for investment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

How are bonds usually written

A

Non-qualifying single premium WOL contracts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are the 3 different types of bond

A

Unit linked
Guaranteed income
Guaranteed growth

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is a term 100 term assurance policy

A

Written to age 100

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

How does a return of premium term insurance work

A

It is effectively an endowment equal to the premium value to return value of premiums on maturity if still alive

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is family income benefit

A

Terms assurance where sum assured is expressed as £X payable yearly until Y

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are the conditions that need to be met for a relevant life policy

A

Capital sum payable on death of a person below age 75
No surrender value
No sums or benefits paid except those prescribed
Trustee will pay to an individual or charity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Hat are multi plans aka

A

Menu plans or universal plans

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are multi plans

A

Usually combine different types of cover, offering lower charges, less overlap and more flexibility

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What are the main potential reasons for needing life cover

A 
Mortgage/loans
Income for surviving spouse
Cost of children
Funeral costs
IHT 
Business liability
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What needs to be assessed to determinamount of cover needed

A

Capital vs income needs

Short and long term needs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are the 3 ways to increase insurance levels to keep up with inflation and earnings increases

A

Index linking
Guaranteed insurability option where sa can be increased at certain life events
Regularly review the clients need for cover

18
Q

What is the natural premium

A

Use mortality tables to determine mortality rate at any given age, multiply by SA to get premium.this increases each year as people age

19
Q

Why are natural premiums not very. Successful

A

Cost of cover. Increases later in life when needed most

20
Q

How do level premiums work

A

Higher premium at the start creates a deserve based on calculations on groups of policies of similar age, sum assured and divide by number in group for sing,e premium

21
Q

What is the pattern for the level of reserve created with alevel premium system

A

For the group it increases, peaks and then steadily falls to nil

22
Q

How do life offices gain interest on premiums

A

Invest them

23
Q

What are the major loadings on a life policy

A

Cover costs and expenses
Safety margin
Profit margin

24
Q

What is frequency loading

A

Added to premiums paid monthly as there is less to invest

25
Q

What are the advantages of putting life assurance in a trust

A

You do not need to wait for probate
It may not be subject to IHT
ensures benefits are distributed according to wishes
Protection against creditors in the event of bankruptcy

26
Q

Which type of trust is most commonly used for life assurance

A

Discretion as you can decide who should benefit without restriction

27
Q

What evidence may be required for underwriting

A 
GP report
Paramedical
Medical examination 
Additional health questionnaire 
Health screening
28
Q

Which act sets out the rules regarding non disclosure

A

Consumer insurance (disclosure and representations) act 2012

29
Q

Under what circumstances of non disclosure can an insurer void a contract for non disclosure.

A

Where there has been deliberate or reckless behaviour

30
Q

If an agent fails to disclose, and they’re an agent of the insurer can the insurer void the contract

A

No

31
Q

What is terminal illness benefit

A

Often added to WOL and sa is paid upon diagnosis of advanced or rapidly progressing incurable and disabling terminal illness at which point the policy ceases

32
Q

What is an assignment

A

Transfer of ownership from one person to another

33
Q

Which act regulates assignment of life policies

A

Policies of assurance act 1876

34
Q

What is needed for an assignee to claim on the assigned policy in their own name

A

Production of policy document and deed of assignment

35
Q

What does section 3 of the policies of assurance act state in relation to notice

A

Priority of notice regulates priority of claim

36
Q

What is the effect of assignment

A

The assigned can surrender, alter or continue the policy and raise a loan on its security

37
Q

What are the usual conditions for a claim to be made

A 
Payment of all premiums 
Production of the policy 
Proof of title
Proof of death 
Proof of age on a death claim
38
Q

If a policy matures in trust what is needed to release the benefit

A

All trustee must sign the discharge

39
Q

Can a copy of a death certificate be used to prove death

A

No must be original

40
Q

How long must someone have disappeared for before presumption of death is made

A

7 years

41
Q

If both owners of a joint life policy die in the same incident if they can’t tell who died first, how do they decide who died first for title purposes

A

The law of property act 1925 provides that they sill be presumed to have died in order of seniority

42
Q

What is needed if policies are lost

A

Execute a statutory declaration setting out the circumstances of loss and stating that the policy has not been assigned or changed

CII - R05 Financial Protection (11 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions