R05 Consumer attitudes to protection: free practice questions

1. Question 1 of 5

   How do today's life patterns compare with those assumed in the decades after the Second World War?

   Option A: They are more complex, with many more important life eventsOption B: They follow a strictly age-based sequenceOption C: They are simpler, with fewer life events and a more predictable orderOption D: They are identical, but people marry later

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   The answer is A: They are more complex, with many more important life events

   Post-war planning assumed a predictable path of marriage, children and retirement. Today people experience many more life events, so age is no longer a reliable trigger for financial decisions.

   Why the other options are wrong

   B

   Age is no longer a reliable trigger; life events no longer follow a strict sequence.

   C

   Life patterns have become more complex, not simpler.

   D

   Patterns have changed in many ways, not just the age of marriage.

2. Question 2 of 5

   What happened to non-advised sales of level term assurance in 2022, and why?

   Option A: They fell sharply, attributed to the cost-of-living crisisOption B: They were banned by the FCAOption C: They rose sharply because of new online comparison portalsOption D: They stayed exactly the same

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   The answer is A: They fell sharply, attributed to the cost-of-living crisis

   The non-advised market had been growing but reversed in 2022, when the share of non-advised level term sales fell sharply as consumers spent money elsewhere during the cost-of-living crisis.

   Why the other options are wrong

   B

   The FCA didn't ban non-advised sales; the fall was linked to the cost-of-living crisis.

   C

   Non-advised sales fell in 2022 rather than rising.

   D

   The market didn't stay the same; non-advised sales fell sharply.

3. Question 3 of 5

   Which of the following is NOT identified as a background driver of changing attitudes to protection insurance?

   Option A: A legal requirement for all adults to hold life coverOption B: A highly developed welfare stateOption C: More informal and flexible family units, with fewer traditional householdsOption D: Technological developments

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   The answer is A: A legal requirement for all adults to hold life cover

   There is no legal requirement to hold life cover. Drivers include the welfare state, changed family models, consumerism, technology, attitudes to personal risk and more spending choices.

   Why the other options are wrong

   B

   This is a recognised driver: a developed welfare state affects how much people feel they need to provide for themselves.

   C

   This is a recognised driver: less traditional, more flexible family units change who depends on whom, and so the need for cover.

   D

   This is a recognised driver: technology has changed how protection is researched, sold and underwritten.

4. Question 4 of 5

   What is one consistent finding in protection insurance research about the cover people hold?

   Option A: People overestimate the cover they have in forceOption B: People hold far more cover than they needOption C: People always know their exact sums assuredOption D: People underestimate the cover they have in force

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   The answer is A: People overestimate the cover they have in force

   Although people have become a little more realistic, research consistently finds that people overestimate the cover they have.

   Why the other options are wrong

   B

   Most people hold less cover than they need, which is why a protection gap exists.

   C

   People often don't know their sums assured, which is why they overestimate.

   D

   Research finds the opposite: people overestimate their cover.

5. Question 5 of 5

   Among consumers unwilling to use a financial adviser, what concerns pointed to a lack of trust?

   Option A: Whether advice could be obtained in person rather than onlineOption B: Whether advisers were suitably qualified and licensed to driveOption C: Whether advice was unbiased and good value given commission or feesOption D: Whether the adviser's office was located close to their home

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   The answer is C: Whether advice was unbiased and good value given commission or fees

   Consumers who would not use an adviser questioned whether the service was genuinely unbiased and represented value for money in terms of commission or fees. Building trust is a key challenge.

   Why the other options are wrong

   A

   Whether advice is face to face or online isn't a trust issue.

   B

   Concerns were about bias and value, not advisers' qualifications or driving licences.

   D

   Office location is about convenience, not trust.

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