FREE CeMAP Module II Questions and Answers

Question 1

What is the typical insurance policy Waiver of Premium (WOP) deferral period?

Accepted Answer

13 weeks

Answer

Waiver of Premium (WOP) is a common feature in protection insurance policies, such as income protection or critical illness cover. It ensures that if the policyholder becomes unable to work due to illness or disability, the insurer will cover future premium payments. The typical deferral period before WOP benefits begin is 13 weeks, providing a safety net after an initial waiting period.

Question 2

The following is stated in the three main Land Law Acts of 1925, with the exception of:

Accepted Answer

The borrower has no legal right to “Let” the mortgaged property

Answer

The Land Law Acts of 1925 aimed to simplify land ownership and conveyancing in England and Wales. While they address issues like minors not holding legal estates and the priority of registered charges, a borrower generally retains the legal right to 'let' (rent out) a mortgaged property. However, they typically require the lender's consent to do so, as it impacts the lender's security.

Question 3

A clause in Peter's mortgage offer stipulates that some repairs must be completed within three months of the property's completion. What does this potentially mean?

Accepted Answer

An undertaking is required

Answer

When a mortgage offer includes a condition for repairs to be completed after completion, the lender often requires an undertaking. An undertaking is a formal promise, usually from the borrower's solicitor, to ensure that specific conditions, like property repairs, are met within a given timeframe. This allows the mortgage funds to be released while providing the lender with assurance that the property will be brought to the required standard.

Question 4

Sylvie owns and operates her own design company. She invests cautiously. In the case of her death, which type of protection is most likely to be appropriate for her capital payback mortgage?

Accepted Answer

Decreasing Term Insurance

Answer

Sylvie has a capital payback mortgage, meaning the outstanding loan balance decreases over time with each repayment. Decreasing Term Insurance is specifically designed to match this reducing debt. The sum assured decreases throughout the policy term, aligning with the diminishing mortgage balance, making it a cost-effective way to ensure the mortgage is fully repaid upon her death.

Question 5

Which of the following statements does not invalidate a guarantee?

Accepted Answer

Change in occupation of the guarantor

Answer

A guarantee can be invalidated if it was obtained through improper means, such as undue influence, duress, or if the guarantor lacked the mental capacity to understand the agreement. These factors compromise the voluntary and informed nature of the guarantee. However, a change in the guarantor's occupation, while potentially affecting their financial situation, does not inherently invalidate a legally binding guarantee that was properly executed.

CeMAP - Certificate in Mortgage Advice and Practice Practice Test

CeMAP - Certificate in Mortgage Advice and Practice Practice Test

FREE CeMAP Module II Questions and Answers