CII R05 Group Insurance Schemes

Question 1

What is 'free cover limit' in a group life assurance scheme?

Accepted Answer

The level of benefit below which individual medical underwriting is not required

Answer

The maximum benefit that can be provided at no premium cost

Answer

The amount of cover provided free to part-time workers

Answer

The minimum level of cover that all employees must receive

Question 2

Under a group death-in-service scheme, benefits are expressed as a multiple of salary. Which authority sets the maximum allowable multiple?

Accepted Answer

HMRC, under registered pension scheme rules — typically 4 times salary

Answer

The Financial Conduct Authority

Answer

The Prudential Regulation Authority

Answer

The employer, with no external limits

Question 3

What is the purpose of a 'master trust' in the context of group life assurance?

Accepted Answer

To provide a pre-established trust structure that employers can use without setting up their own trust

Answer

To hold the employer's assets separately from group scheme assets

Answer

To pool all group life policies across multiple insurers

Answer

To manage employer contributions to group pension schemes

Question 4

A group income protection scheme has a 'benefit definition' of 'own occupation' for the first two years of claim. What typically happens after two years?

Accepted Answer

The definition switches to 'any occupation' after the initial period

Answer

The claim automatically ends after two years

Answer

The benefit increases by 20% after two years

Answer

The employer must make additional contributions after two years

Question 5

Which regulation requires employers to provide all employees with access to a qualifying workplace pension scheme?

Accepted Answer

Auto-enrolment legislation under the Pensions Act 2008

Answer

The Financial Services and Markets Act 2000

Answer

The Equality Act 2010

Answer

The Employment Rights Act 1996

Question 6

What is the tax treatment of a group critical illness benefit paid to an employee under an employer-paid scheme?

Accepted Answer

The benefit is taxed as employment income

Answer

The benefit is paid free of income tax

Answer

The benefit is subject to capital gains tax

Answer

The benefit is exempt up to £30,000 then taxed at the employee's marginal rate