R05 Divorce and relationship breakdown: free practice questions

1. Question 1 of 5

   What is the effect of a divorce on an ex-spouse's existing interest in a life policy?

   Option A: All interests in the policy end automatically on divorceOption B: The interest continues unless the court orders otherwiseOption C: The policy is automatically split in half between themOption D: The policy becomes void

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   The answer is B: The interest continues unless the court orders otherwise

   Divorce itself does not change a person's interest in a policy as policyholder, life assured, trustee or beneficiary, unless the court orders otherwise.

   Why the other options are wrong

   A

   Divorce doesn't automatically end existing interests in a policy.

   C

   Policies aren't automatically split in half on divorce.

   D

   A divorce doesn't make a life policy void.

2. Question 2 of 5

   Which of the following can a divorce court do regarding an existing life policy?

   Option A: Only order a change to the premium being paidOption B: Nothing, as insurance policies fall outside the court's powersOption C: Order a policy to be transferred or maintained, or vary a trustOption D: Only order that the policy is surrendered for cash

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   The answer is C: Order a policy to be transferred or maintained, or vary a trust

   Divorce courts can make any order they see fit about either party's property, including ordering a policy to be transferred or maintained, or varying the terms of a trust.

   Why the other options are wrong

   A

   The court's powers go well beyond changing the premium.

   B

   Divorce courts can make orders about life policies, which count as property.

   D

   The court isn't limited to ordering a surrender.

3. Question 3 of 5

   Rhona and Stan are divorcing. Stan's health has deteriorated since they took out their joint policy. Why might policy splitting be valuable?

   Option A: Split policies need no underwriting and keep the original start dateOption B: Splitting the policy cancels any existing exclusionsOption C: Split policies automatically have higher sums assured than the originalOption D: The split policies attract income tax relief on their premiums

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   The answer is A: Split policies need no underwriting and keep the original start date

   Many insurers allow splitting on divorce without underwriting, treating both policies as starting on the original date. This helps where health has worsened or newer definitions are less generous.

   Why the other options are wrong

   B

   Splitting keeps the original terms; it doesn't remove exclusions already applied.

   C

   Splitting doesn't automatically increase the sums assured; its value is avoiding fresh underwriting.

   D

   Splitting a policy doesn't create income tax relief on the premiums.

4. Question 4 of 5

   Tia receives maintenance of £12,000 a year for eight more years from her ex-husband. What is the extent of her insurable interest in his life?

   Option A: Unlimited, as they were marriedOption B: Limited to £12,000, one year's maintenanceOption C: Limited to the value of the maintenanceOption D: Nil, as they are divorced

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   The answer is C: Limited to the value of the maintenance

   An ex-spouse can insure the other's life only up to the amount of maintenance, which is the extent of their insurable interest. Here the maintenance is worth up to about £96,000 over the remaining term.

   Why the other options are wrong

   A

   Divorced spouses don't have the unlimited interest of a married couple; Tia's interest is financial and limited.

   B

   £12,000 is only one year's maintenance; her interest covers the maintenance still to be paid over the remaining term.

   D

   She still has an insurable interest because she depends on his maintenance payments.

5. Question 5 of 5

   How does the breakdown of a long-term unmarried relationship compare with divorce for protection planning?

   Option A: It lacks divorce's legal effects but should still prompt a reviewOption B: It automatically cancels any joint policies the couple holdOption C: It has no relevance at all to protection planningOption D: It has exactly the same legal consequences as divorce

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   The answer is A: It lacks divorce's legal effects but should still prompt a review

   Relationship breakdown does not carry the legal consequences of divorce or dissolution, but it may still call for a similar review of existing cover.

   Why the other options are wrong

   B

   Separation doesn't automatically cancel joint policies.

   C

   It's still relevant: existing cover should be reviewed.

   D

   It doesn't have the legal consequences of divorce or dissolution.

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