R05 Deferred periods: free practice questions

1. Question 1 of 5

   In an income protection policy, what is the deferred period?

   Option A: The notice period before the insurer can change premiumsOption B: The time after the policy starts before any claim can be madeOption C: The waiting period during a claim before benefit becomes payableOption D: The period after recovery during which a relapse is linked to the first claim

   Show answer

   The answer is C: The waiting period during a claim before benefit becomes payable

   The deferred period is the length of continuous incapacity that must pass before benefit starts. It is not an initial exclusion period from the policy start.

   Why the other options are wrong

   A

   Premium change notice periods aren't the deferred period.

   B

   It isn't a waiting period from the start of the policy; it runs from the start of incapacity.

   D

   Linking a relapse to an earlier claim is a separate provision.

2. Question 2 of 5

   Which deferred periods are the most common on individual income protection policies?

   Option A: 4 or 8 weeksOption B: 52 or 104 weeksOption C: 1 or 2 weeksOption D: 13 or 26 weeks

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   The answer is D: 13 or 26 weeks

   The most common deferred periods are 13 and 26 weeks. Shorter periods, such as four weeks or day one, and longer ones, such as 52 or 104 weeks, are also available.

   Why the other options are wrong

   A

   Four weeks is available, but 13 and 26 weeks are the most common.

   B

   52 and 104 weeks are available but less common.

   C

   One or two weeks aren't common deferred periods for individual IP.

3. Question 3 of 5

   Xavier's employer pays full salary for the first 26 weeks of sickness and nothing after that. Which deferred period is most appropriate for his income protection policy?

   Option A: Day oneOption B: 4 weeksOption C: 26 weeksOption D: 104 weeks

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   The answer is C: 26 weeks

   Matching the deferred period to the end of employer sick pay avoids paying for cover he does not need, as benefit may be restricted while salary continues, and avoids a gap in income.

   Why the other options are wrong

   A

   Day one cover would duplicate his full pay for six months.

   B

   Four weeks would pay for cover he doesn't need while his salary continues.

   D

   104 weeks would leave a long gap after his sick pay stops.

4. Question 4 of 5

   Yasmin receives full pay for 13 weeks and then half pay for a further 13 weeks when sick. Which feature would best match her income protection to this pattern?

   Option A: A single 52-week deferred periodOption B: A day one policy with a limited termOption C: A split deferred periodOption D: A back to day one policy

   Show answer

   The answer is C: A split deferred period

   A split deferred period provides part of the benefit after the first stage, when pay halves, and the rest when sick pay stops. This fits a full pay then half pay pattern.

   Why the other options are wrong

   A

   A 52-week deferred period would leave her with nothing once her pay halves at 13 weeks.

   B

   A day one policy would duplicate her full pay and cost far more.

   D

   Back to day one pays from the first day of a recurring claim; it doesn't match a full then half pay pattern.

5. Question 5 of 5

   Which statement about deferred periods is FALSE?

   Option A: The deferred period should reflect any employer sick payOption B: Longer deferred periods lower the premiumOption C: A shorter deferred period always gives better value for moneyOption D: Some policies pay from day one

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   The answer is C: A shorter deferred period always gives better value for money

   A shorter deferred period costs more and may duplicate employer sick pay or savings. The best choice depends on the client's other resources, so shorter is not automatically better value.

   Why the other options are wrong

   A

   This is true: the deferred period should reflect any employer sick pay.

   B

   This is true: a longer deferred period lowers the premium.

   D

   This is true: some policies pay from day one.

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