R05 IP claims and exclusions: free practice questions

1. Question 1 of 5

   When should an insured person notify their income protection insurer of an incapacity?

   Option A: In writing as soon as possibleOption B: Within 12 months of stopping workOption C: Only once the deferred period has endedOption D: Only when a doctor confirms the condition is permanent

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   The answer is A: In writing as soon as possible

   Early written notification registers the incapacity and starts the deferred period. With long deferred periods, the insurer may simply register it at first.

   Why the other options are wrong

   B

   There's no 12-month window; notice should be given as soon as possible.

   C

   Waiting until the deferred period ends risks problems; notice should be given early.

   D

   Notice shouldn't wait for confirmation that the condition is permanent.

2. Question 2 of 5

   Once in payment, IP benefit normally continues until the earliest of several events. Which of the following is NOT one of them?

   Option A: The first anniversary of the claimOption B: The end of the policy term or ceasing ageOption C: The claimant's return to workOption D: The death of the claimant

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   The answer is A: The first anniversary of the claim

   Benefit usually continues until return to work, policy expiry or death, unless the policy has a limited payment term. Periodic medical certificates are normally needed during the claim.

   Why the other options are wrong

   B

   The end of the policy term does end the claim.

   C

   A return to work does end the claim.

   D

   The claimant's death does end the claim.

3. Question 3 of 5

   If an insurer believes a claimant will never recover, what alternative to continuing monthly benefit might it offer?

   Option A: A commuted lump sum instead of ongoing benefitOption B: A transfer of the claim to the StateOption C: A reduction in future premiumsOption D: Conversion to a critical illness policy instead

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   The answer is A: A commuted lump sum instead of ongoing benefit

   Where recovery is not expected, the insurer may offer a commuted lump sum in place of regular payments for the rest of the claim period.

   Why the other options are wrong

   B

   The insurer can't transfer its liability to the State.

   C

   Reducing premiums isn't the alternative offered.

   D

   An IP claim isn't converted to critical illness cover.

4. Question 4 of 5

   What is the general purpose of IP exclusions such as failure to follow medical advice?

   Option A: To allow the policy to qualify for tax relief on its premiumsOption B: To reduce the benefit limit to 50% of earnings for higher-risk claimsOption C: To prevent claims caused by the insured's own actions or avoidable situationsOption D: To shorten the deferred period for claimants who follow their doctor's advice

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   The answer is C: To prevent claims caused by the insured's own actions or avoidable situations

   Exclusions stop claims where the condition results from the insured's own actions or circumstances they could reasonably have avoided. Some policies have no standard exclusions and use individual ones instead.

   Why the other options are wrong

   A

   Exclusions have nothing to do with tax relief.

   B

   Exclusions don't change the benefit limit.

   D

   Exclusions don't change the deferred period.

5. Question 5 of 5

   Which countries are, at a minimum, included in the approved countries of residence for most UK income protection policies?

   Option A: All Commonwealth countriesOption B: Any country with a double taxation agreementOption C: The UK and the Republic of IrelandOption D: The UK only

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   The answer is C: The UK and the Republic of Ireland

   Approved countries always include at least the UK and Ireland, usually extend to the EU or Western Europe, and often include the USA, Canada, Australia and New Zealand.

   Why the other options are wrong

   A

   Commonwealth membership isn't the test.

   B

   Double taxation agreements aren't the test.

   D

   Approved countries include more than the UK, at least the Republic of Ireland too.

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