CII R05 Critical Illness and Income Protection

Question 1

Which of the following is NOT typically covered by a standard critical illness policy?

Accepted Answer

Broken leg

Answer

Critical illness policies cover specified serious, life-threatening conditions such as heart attack, stroke, and cancer. Minor injuries like a broken leg are not included.

Question 2

What does 'activities of daily living' (ADLs) assess in the context of long-term care and some protection policies?

Accepted Answer

The claimant's ability to perform physical tasks such as washing, dressing, and eating

Answer

ADLs are used to assess functional ability — typically six activities: washing, dressing, eating, mobility, continence, and transferring. Inability to perform a specified number triggers care-related benefits.

Question 3

Under a critical illness policy, what is meant by a 'moratorium period'?

Accepted Answer

The period at the start of the policy during which no claims for pre-existing conditions will be paid

Answer

A moratorium period (typically 1–2 years at policy inception) excludes claims arising from pre-existing conditions that the policyholder had symptoms of before the policy started.

Question 4

Which definition of disability requires the policyholder to be unable to perform a specified number of Activities of Daily Living to qualify for benefit?

Accepted Answer

ADL definition

Answer

The ADL definition bases disability on an inability to perform a certain number of activities of daily living (e.g., 3 out of 6), rather than linking benefit to an occupation.

Question 5

A 35-year-old non-smoker purchases critical illness cover with a 30-year term. Which factor would most significantly increase the premium?

Accepted Answer

Adding waiver of premium

Answer

Waiver of premium adds the cost of covering premium payments during disability to the base premium, increasing overall cost. A longer deferred period would reduce (not increase) premiums on income protection, not critical illness.

CII R05 Practice Test

CII R05 Practice Test

CII R05 Critical Illness and Income Protection