QFA Life Assurance Practice Test

These questions are part of the practice quiz. Start practicing

• What is a common characteristic of term assurance policies?
• Which risk type is most closely associated with equity investment?
• Which of the following entities has the authority to administer a deceased's estate if no executor is appointed?
• Is the State Illness Benefit liable to income tax?
• What happens to the ownership of a property jointly owned by Tom and Jerry if Tom dies?
• Who must verify suitability when the execution-only provision is applied in a transaction?
• Which of the following is a characteristic of life insurance?
• The MAIN reason why the premium under a Term Assurance policy with automatic indexation increases faster than the increase in cover is?
• What does a premium waiver rider do?
• Owen pays €250 each month to a unit-linked savings plan. Why does the number of units allocated vary each month?
• Deflation refers to which of the following?
• What is the primary purpose of life insurance?
• What is the primary purpose of medical underwriting in life assurance?
• How does life insurance help mitigate financial risks for families?
• At what income level does Daniel pay a lower rate of USC if he does not hold a medical card?
• What challenge do insurers face when insuring older individuals?
• What is the primary goal of life insurance fraud prevention programs?
• If Owen successfully claims his serious illness cover, how much life cover will he have remaining?
• How do life insurance companies typically invest the premiums they collect?
• What term describes the practice of persuading clients to replace existing life assurance policies primarily for the adviser’s benefit?
• An external unit-linked fund is managed by whom?
• Which of the following best describes Term Assurance?
• What does cash value refer to in whole life insurance?
• What is a potential benefit of having a cash value component in a life insurance policy?
• How is "coverage period" defined in a term life insurance policy?
• When must the Reason Why statement be provided to a client according to the Consumer Protection Code?
• For Section 73 relief to apply using a unit-linked savings plan for gift tax, regular contributions must be paid for how many years at least?
• Most of the money invested in a partially guaranteed structured retail product is primarily used to:
• Which of the following incomes is solely assessed under Schedule E?
• Which of the following can lead to a reduction in benefits under a policy?
• If a unit-linked fund has total assets of €20 million and acquisition costs of 2%, what is the fund's current unit price with 1,000,000 units?
• How can life insurance assist in estate planning?
• What is the maximum amount of Income Protection premiums that Frank can claim as income tax relief for the year 2020?
• In the context of life assurance, what does 'utmost good faith' require from both parties?
• If a policyholder does not disclose relevant health information during their application, what might be a consequence?
• What is David's inheritance tax liability on €300,000 from Samantha?
• How does term life insurance primarily differ from whole life insurance?
• A dual life policy held by a married couple is legally presumed to be held as what?
• What does 'automatic accrual of goodwill' mean in a partnership?
• If Debra invests €40,000 for nine years at a return of 2.5% per annum, what will her investment grow to?
• What is the key piece of information needed to compare quotations from two life companies providing the same coverage?
• What is the present value of €20,000 payable in 10 years at a 2.5% per annum discount rate?
• If Mike discovers he has lung cancer after submitting a Term Assurance proposal, what must he do?
• What types of risks are commonly excluded from a standard life insurance policy?
• Which of the following reasons makes a convertible term policy more suitable than a unit-linked whole of life policy?
• If Jackie wants to maintain the real purchasing power of her life cover, which option should she add to the Term Assurance policy?
• What is the consideration for a life assurance policy contract?
• What does actuarial science primarily involve?
• Which two types of risks are primarily assessed in life insurance underwriting?
• What is the expected proportion of lives assured that is likely to develop a serious illness within the next 12 months called?
• What is the primary function of life insurance illustrations?
• What does it mean if a mortgage protection policy is described as 'interest rate sensitive'?
• Which of the following factors is NOT assessed during financial underwriting?
• Which risk is associated with a Convertible Term Assurance policyholder?
• If a unit-linked whole of life policy has a sum assured of €100,000 and an encashment value of €5,000, what is the sum at risk for that month?
• Which statement regarding the exercise of a conversion option on a Convertible Term Assurance (CTA) is CORRECT?
• The practice of 'churning' is particularly criticized because it can lead to which of the following?
• What benefit does indexation provide in life assurance policies?
• What is the primary benefit of a rebalancing feature in a unit-linked bond?
• Why are life insurance policies usually considered long-term commitments?
• What does a 90% capital guarantee at maturity imply for investors?
• The Disclosure of Information Notice for a unit-linked whole of life policy must show the increased premium to provide cover until which subsequent birthday?
• How does a suicide clause affect life insurance policies?
• What document is required to change legal ownership of a life insurance policy?
• When the Consumer Protection Code's execution-only provisions apply, what is required from the adviser?
• How does term life insurance differ from whole life insurance in terms of payout?
• What does it indicate if a life insurance policy is described as "in force"?
• Which of the following is a common reason insurers require disclosures on past medical history?
• Which type of life insurance is typically more affordable for young people?
• What is the purpose of the examination of insurability in life insurance?
• What minimum share of his estate will Angelika be legally entitled to if Joe dies without a Will?
• What happens to the premiums of a life assurance policy if the policyholder opts for a freeze on premiums?
• What is the current encashment value of a unit-linked savings plan with 1,560 units, a current unit price of €1.55, and an encashment charge of 4% for the second year?
• What defines the characteristics of structured investment plans in unit-linked policies?
• In which scenario is it typically LEAST beneficial to opt for additional coverage in a life assurance policy?
• How is fund-based commission payable to an insurance intermediary in relation to a unit-linked bond recovered by the life company?
• Salary and wages from employment are assessed under which tax schedule?
• If Jean's monthly premium for €100,000 Term Assurance cover is €8.50, what would the total monthly premium be for €250,000 cover, including all fees?
• What is the "right of rescission" in life insurance?
• What is the significance of the effective date in a life insurance policy?
• What gift tax liability will Mark incur on a €400,000 gift from his father if he has received no prior gifts?
• If Enda dies without a Will and is survived by his wife and one child, what minimum share of his estate is the child entitled to?
• If a partner dies, what happens to their share of goodwill in the partnership?
• In which type of unit funds may a life company refuse policyholder switch instructions?
• Why is joint life last survivor guaranteed whole of life cover cheaper than joint life first death cover?
• What is the primary role of the Life Insurance Council in the industry?
• Which ethical consideration is important when selling life insurance?
• Financial underwriting aims to prevent which scenario in life assurance?
• If Morgan dies, legal title to his Term Assurance policy, which is not assigned or written under trust, passes to whom?
• If a unit-linked bond's current encashment value is €67,000 and a deemed encashment is due, what is the exit tax taken from the bond?
• What investment management style does a unit-linked fund adopt if it aims to match the return of similar competing funds?
• Why are the premiums for Keyperson Insurance on Newstead Limited's chief executive not deductible for Corporation Tax purposes?
• If inflation runs at 5% per annum over four years, to keep pace with inflation, what must an investment of €25,000 grow to?
• In context to unit-linked policies, what does ‘charge’ typically refer to?
• What is the treatment of income from a dual life policy upon the death of one spouse?
• Which type of policy would be unsuitable for someone who wants coverage beyond age 65?
• How is Joan's automatic income payment from a unit-linked bond taxed?
• What is a premium in the context of life insurance?
• The cost of a life assurance policy will be cheaper if?
• Eoin's strategy of switching from a cash fund to an equity fund over time is intended to mitigate which risk?
• What is the most suitable cover for someone wanting permanent total disability beyond age 65?
• What factors does underwriting assess in life insurance?
• What does "insurable interest" refer to in life insurance?
• The primary financial need of a client in their 60s is likely to be?
• What does the 'deferred period' refer to in an income protection insurance policy?
• What is the primary purpose of a life assurance policy Disclosure Notice?
• What does "substandard" risk classification indicate about an individual?
• Which benefit is liable to income tax only?
• Which document is key for regulating the affairs of a partnership?
• What is a limitation associated with unit-linked savings plans?
• What type of policy provides a fixed amount of life cover for life in return for a fixed premium?
• What role do actuaries serve in the life insurance sector?
• What does the 'breakeven point' refer to in a unit-linked savings plan?
• Which characteristic is typical of universal life insurance?
• What does a term conversion option allow a policyholder to do?
• How does cash surrender value differ from death benefit in a life insurance policy?
• What is the purpose of a statement of health in life insurance applications?
• What type of reinsurance involves a life assurance company re-insuring 33% of every sum assured proposed to it?
• Why is the contestability period important in life insurance?
• What is a rider in life insurance?
• What is the sum insured in Sean's life cover policy as quoted by Life Company A?
• Why do life companies financially underwrite life assurance proposals?
• What are living benefits in a life insurance policy?
• What characterizes a simplified issue life insurance policy?
• What is the current encashment value of a unit-linked whole of life policy with a life cover of €100,000 and 1,450 units valued at €1.44 each?
• In the context of life assurance, what does 'morbidity rate' refer to?
• What risk does Carole face when applying for a convertible term assurance?
• If a life assurance policy is held jointly, what legal assumption applies?
• How is the State Widow's Contributory Pension treated for tax purposes?
• What occurs during a policy lapse?
• Which type of investment fund is considered illiquid and unsuitable for partial encashment?
• Which factor influences the premium payable for a €100,000 life assurance policy?
• In a partnership insurance arrangement, who pays the highest premium?
• How do life insurance policies contribute to estate planning?
• What are the general tax implications of life insurance death benefits for beneficiaries?
• What is the role of a beneficiary in a life insurance policy?
• If John and Maria both die together in a car crash, what TOTAL amount will be paid out on their dual life Term Assurance policy?
• What is the typical age range for purchasing life insurance?
• What must Alex do to make a successful claim on his serious illness cover with a Term Assurance policy?
• Which of the following features CAN apply to a Pension Term Assurance policy?
• If Matthew dies leaving no Will, he is said to have died:
• When must a life assurance Disclosure Notice be given to a client?
• What is the primary tax implication for Mary inheriting from a retirement fund?
• Under the Consumer Protection Code, how many business days does a life company have to issue a claim form after notification of a death?
• What does "exclusion" refer to in a life insurance policy?
• If a single person dies without a Will and has a spouse and child, what is the spouse's inheritance?
• In a life assurance policy taken out by Keith on Aoife's life, who is the grantee of this policy?
• What is the main function of an insurance regulator?
• Factfinding is also known as?
• What document controls a Designated Activity Company's relationship with its shareholders?
• Which of the following does NOT incur the Universal Social Charge?
• What is a convertible term life insurance policy?
• What is the process of matching financial products to a consumer known as?
• What differentiates group life insurance from individual life insurance?
• Why are exclusions and limitations important in a life insurance policy?
• What does a mortality table in life insurance represent?
• Who is responsible for managing the distribution of assets when Conor dies leaving a Will?
• What can happen to a life insurance policy if the premiums are not paid?
• If the encashment value of a unit-linked whole of life policy becomes zero, what can the life company do?
• Medical underwriting is primarily used by life companies for what reason?
• If Patrick takes out a life assurance policy on the life of his wife, Emma, what is this policy called?
• What amount will the life assurance company pay out if Dermot, who has a Term Assurance policy, is killed shortly after missing a payment?
• What happens to the encashment charge on a unit-linked savings plan after the sixth year?
• Why might premiums of a convertible term assurance later increase for Carole?
• What is the minimum time requirement for making regular contributions to qualify for Section 73 relief on gift tax?
• Which of the following represents a risk for an income protection policyholder?
• What is a lapse letter in the context of life insurance?
• A need to accumulate a capital sum from regular surplus income over a period of time is which type of personal financial need?
• If Charles dies in year seven when the unit price is €1.980, what will be the death benefit payout, rounded up before any exit tax deduction?
• Which of the following describes an advantage of a unit-linked policy over traditional life assurance?
• Which of the following are the two main types of life insurance?
• How can policyholders access the cash value of a whole life insurance policy?
• Noel has 12,456 units in a Managed Fund with a unit price of €1.455. What is the current encashment value of his plan?
• Which inheritances received by Shane from Jackie are exempt from inheritance tax?
• What is the term for a guaranteed whole of life assurance policyholder who has ceased paying premiums but the life company has maintained the policy with reduced cover?
• Which question can a life assurance company NOT ask on a proposal form?
• What amount is Ian liable to income tax on as a partner in a dental practice?
• What is the significance of beneficiaries in life insurance policies?
• When does a life assurance company generally pay out a claim?
• In relation to gift tax, what is the maximum gift value that Mark can receive without incurring tax?
• How does stand-alone serious illness cover differ from accelerated serious illness cover?
• Why is the premium for policy A higher than that for policy B in mortgage protection?
• What does the underwriting process in life insurance involve?
• What factor can influence the premium rates for a life insurance policy?
• What term is used to describe the minimum guaranteed return on an investment in a Structured Retail Product?
• Which of the following will NOT revoke a Will?
• How is an inheritance of €750,000 from an ARF taxed for Mary?
• How do life insurance policies typically address accidental death?
• The deliberate withholding of material facts in life assurance violates which legal principle?
• After Brian switches his bond from the Managed Fund to the Cash Fund, how many units will he have allocated in the Cash Fund?
• What is the death benefit of a whole life insurance policy?
• Which condition might lead to a policyholder being deemed uninsurable?
• What is the grace period in a life insurance policy?
• What does an "active policy" refer to in life insurance?
• A Technology Fund is classified as which type of fund?
• What is the legal term for a cohabiting partner who has children but is not married?
• What type of cover is NOT typically associated with Term Assurance policies?
• What is the face amount of a life insurance policy?
• What action does Tom take to potentially reinstate his life assurance policy?
• A unit-linked bond is categorized as which type of life assurance policy?
• Which event will revoke Niall's Will?
• What is the role of financial advisers in life insurance decisions?
• When is a lower premium likely for a joint life last survivor policy compared to first death cover?
• The death benefits paid out by a regular income benefit policy are treated in the hands of the deceased's dependants for tax purposes as?
• What is an accelerated death benefit?