CII R05 Income Protection

Question 1

What is the maximum benefit typically payable under an individual income protection policy?

Accepted Answer

Up to 60% of pre-incapacity gross earnings, less any state benefits and other income

Answer

100% of pre-incapacity gross earnings

Answer

50% of net earnings after tax

Answer

75% of gross earnings with no deductions

Question 2

What is the purpose of the deferred period in an income protection policy?

Accepted Answer

It is the waiting period between the start of incapacity and when benefit payments begin

Answer

It is the period after which the policy cannot be cancelled by the insurer

Answer

It is the notice period required to make a claim

Answer

It is the period during which the policyholder can change the level of cover

Question 3

An 'own occupation' definition of incapacity in an income protection policy means the claimant:

Accepted Answer

Must be unable to perform the material and substantial duties of their own specific occupation

Answer

Must be unable to perform any occupation whatsoever

Answer

Must be unable to perform at least three activities of daily living

Answer

Must have been made redundant from their own occupation

Question 4

What is the difference between a guaranteed and reviewable premium income protection policy?

Accepted Answer

Guaranteed premiums remain the same for the policy term; reviewable premiums can be increased by the insurer at review dates

Answer

Guaranteed premiums can be increased at any time without notice; reviewable premiums are fixed

Answer

There is no difference — all income protection premiums are guaranteed

Answer

Reviewable premiums are always cheaper throughout the entire policy term

Question 5

A 'suited occupation' definition in an income protection policy means the claimant must be unable to perform:

Accepted Answer

Any occupation suited to their education, training, and experience

Answer

Only their current job role

Answer

Any manual occupation

Answer

Only sedentary office work

Question 6

Under an income protection policy, what happens to benefit payments if the claimant partially recovers and returns to work part-time?

Accepted Answer

A proportionate or reduced benefit may be paid to reflect the reduced earnings

Answer

Benefits cease immediately as soon as any work is undertaken

Answer

The claimant must repay all benefits received during the claim

Answer

Benefits continue at the full rate for a further 12 months