CII R05 Life Assurance Products

Question 1

What type of life assurance policy provides cover for a fixed term and pays out only if the policyholder dies within that term?

Accepted Answer

Term assurance

Answer

Whole of life assurance

Answer

Endowment policy

Answer

With-profits bond

Question 2

Which life assurance policy is designed to pay out on both death AND on survival to the end of the policy term?

Accepted Answer

Endowment policy

Answer

Term assurance

Answer

Whole of life assurance

Answer

Level annuity

Question 3

What is the key distinguishing feature of a whole of life assurance policy?

Accepted Answer

It guarantees a payout because it covers the entire lifetime of the insured

Answer

It only pays on death within a specified term

Answer

It provides cover linked to a mortgage

Answer

It is only available through employer group schemes

Question 4

A decreasing term assurance policy is most commonly used to cover which type of debt?

Accepted Answer

Repayment mortgage

Answer

Credit card debt

Answer

Interest-only mortgage

Answer

Student loan

Question 5

What is meant by a 'convertible' term assurance policy?

Accepted Answer

It can be converted into a whole of life or endowment policy without further medical evidence

Answer

It can be cashed in before the end of the term

Answer

It converts to an annuity on maturity

Answer

It automatically renews at the end of each term

Question 6

Which of the following best describes a 'with-profits' whole of life policy?

Accepted Answer

Bonuses are added to the sum assured based on the insurer's investment performance

Answer

The sum assured is fixed throughout the policy's life

Answer

The policy only pays out if a specified illness is diagnosed

Answer

The premiums reduce annually based on market conditions