Chapter 3

Question 1

What are the main events that have a high potential impact on individuals and their families?

Answer 1

Death,
Serious Illness,
Disability

Question 2

What are the main areas for protection needs?

Answer 2

The event of death
Critical Illness
Unemployment / Redundancy

Question 3

What can a Life Assurance Policy provide?

Answer 3

Provides a lump sum payed out due to an individual unable to work because of a serious injury or critical illness.

Question 4

What are the main types of protection cover?

Answer 4

Income Protection
Private Medical Insurance
Critical Illness Cover
Accident, Sickness and Unemployment
Long-term Care
Personal Accident and Sickness Insurance

Question 5

What categories will whole of life policies fall in?

Answer 5

With-Profit
Non-Profit
Unit-Linked

Question 6

What are three areas/ circumstances, other then the event of death, that an individual might need to protect?

Answer 6

Three of the following:

• Health (provision against illness, incapacity or accident)
• Income, mortgage and other dept
• Asset protection
• Business protection

Question 7

List three areas/ circumstances. other than the event of death, that an individual might need to protect?

Answer 7

Health (Provision against illness, incapacity or accident)
Income, mortgage and other debt
Asset protection
Business protection

Question 8

Why, despite the existence of the state protection, should an individual consider additional protection provision?

Answer 8

• The level of benefit may fall short of what is required for the individual to maintain their standard of living.
• The individual may not meet the eligibility criteria, which is often linked to national insurance contributions and/or their level of capital and income.
• The benefit may only be payable for specific term which is shorter than the required time.

Question 9

What is the difference between income protection insurance and payment protection insurance?

Answer 9

Income protection insurance provides a regular income when the insured is unavailable to work due to accident or illness and is payable until retirement.

Payment protection insurance provides an income to cover mortgage or loan payments if the insured suffers ab accident or is unable to work due to sickness, redundancy or unemployment.