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

Term assurance covers a specified period and pays the sum assured only on death within that term. If the policyholder survives, no benefit is paid.

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

An endowment policy combines life assurance with a savings element, paying out the sum assured either on death during the term or on survival to maturity.

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

Whole of life assurance provides cover for the entire lifetime of the insured, guaranteeing a payout whenever death occurs, making it certain to pay out eventually.

Question 4

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

Accepted Answer

Repayment mortgage

Answer

Decreasing term assurance mirrors the outstanding balance of a repayment mortgage, where the sum assured reduces over time in line with the reducing capital balance.

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

A convertible term assurance gives the policyholder the right to convert the policy to a permanent plan (whole of life or endowment) without providing further evidence of health.

CII R05 Practice Test

CII R05 Practice Test

CII R05 Life Assurance Products