R05 CIC options and variations: free practice questions

1. Question 1 of 5

   What is a typical survival period under a stand-alone critical illness policy?

   Option A: 24 hoursOption B: One yearOption C: 14 to 30 daysOption D: Six to 12 months

   Show answer

   The answer is C: 14 to 30 days

   Stand-alone policies commonly require survival of 14 to 30 days after diagnosis. The ABI Minimum Standards do not specify a set survival period.

   Why the other options are wrong

   A

   24 hours is much shorter than a typical survival period.

   B

   One year is far longer than usual.

   D

   Six months is far longer than usual.

2. Question 2 of 5

   Which statement about children's critical illness cover under an adult policy is correct?

   Option A: It usually allows unlimited claims for each childOption B: Each child must be fully medically underwritten firstOption C: Any claim reduces the adult's own sum assuredOption D: It is an underwriting-free extra, subject to claim limits

   Show answer

   The answer is D: It is an underwriting-free extra, subject to claim limits

   Children's cover is an 'added value' benefit without underwriting. It pays a set amount, such as £25,000, or a percentage of the sum assured, often limited to, say, two claims per policy and one per child. Pre-existing conditions are excluded.

   Why the other options are wrong

   A

   Claims are limited, for example one per child.

   B

   Children's cover isn't individually underwritten.

   C

   A children's claim doesn't reduce the adult's cover.

3. Question 3 of 5

   Under a critical illness guaranteed insurability option, what does the policyholder gain on events such as the birth of a child?

   Option A: A reduction in the premium for the rest of the policy termOption B: Automatic cover for any of the child's pre-existing conditionsOption C: The right to increase cover by a set amount without underwritingOption D: A cash payment equal to one year's premiums on each event

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   The answer is C: The right to increase cover by a set amount without underwriting

   Guaranteed insurability allows set increases in cover on specified life events, such as marriage or the birth of a child, without new medical evidence. The premium changes to reflect the higher cover.

   Why the other options are wrong

   A

   Using the option raises the premium rather than lowering it.

   B

   It doesn't cover a child's pre-existing conditions.

   D

   It's the right to increase cover, not a cash payment.

4. Question 4 of 5

   Olly and Priya have joint life critical illness cover and are divorcing. What feature offered by some insurers would help them most?

   Option A: Cancelling the policy with a full refund of all the premiums paidOption B: Transferring the whole policy to the younger of the twoOption C: Converting the policy into a whole of life investment bondOption D: Splitting the policy into two single policies without underwriting

   Show answer

   The answer is D: Splitting the policy into two single policies without underwriting

   Some insurers let joint policies be split on separation or divorce without new underwriting. Some also allow the other joint insured to take a new single policy without medical evidence after one partner claims.

   Why the other options are wrong

   A

   Protection policies have no refund of premiums on cancellation.

   B

   Handing the whole policy to one partner leaves the other without cover; splitting helps both.

   C

   Critical illness cover can't be converted into an investment bond.

5. Question 5 of 5

   Which of the following is NOT one of the specified work tasks used in the ABI total and permanent disability definition?

   Option A: Using a computer keyboardOption B: WalkingOption C: Getting in and out of a carOption D: Lifting

   Show answer

   The answer is A: Using a computer keyboard

   The specified work tasks are walking, climbing, lifting, bending, getting in and out of a car, and writing. Using a keyboard is not one of them.

   Why the other options are wrong

   B

   Walking is one of the specified work tasks.

   C

   Getting in and out of a car is one of the specified work tasks.

   D

   Lifting is one of the specified work tasks.

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