QFA Life Assurance Sample Paper 2
Exam Questions And Answers
A need to provide for the financial impact of certain unpredictable events, which may cause an
interruption in a client's earned income, is which type of personal financial need?
A Savings
B Investment
C Protection
D Loan - ANS C
1.1 - Main types of personal financial needs
The primary financial need of a typical couple in their early 30s is likely to be:
A Serious Illness cover
B Lump sum Investment
C Retirement Planning
D Saving for a deposit to obtain a home loan to purchase property. - ANS D
1.3 - Life Cycle
A life assurance policy taken out to pay off taxes arising on death is which type of policy?
A Savings
B Investment
C Protection
D Loan - ANS C
1.4 - Life assurance policies to meet financial needs
Which one of the following restrictions usually applies to the exercise of an insurability option on
a life assurance policy?
A The life assured must be in good health at the time of exercise of the option
B The option must be exercised before a specified age
C The life assured must have paid premiums on the policy for at least 10 years
D The policy must have an encashment value at the time of exercise of the option - ANS B
,2.4 - Ancillary/Optional Benefits
Allister has a Term Assurance policy for €250,000 life assurance cover. The policy also provides
an equivalent level of terminal illness cover.
If Allister makes a successful terminal illness claim on the policy, what happens to the policy
after payment of the terminal illness claim?
A It continues with €250,000 life cover, subject to the continued payment of the premium
B It is made paid up with a reduced level of life cover
C It is made paid up at €250,000 life cover, with no further premiums to pay
D It is terminated by the life company - ANS D
2.47 - Ancillary/Optional benefits
Which one of the following factors will NOT impact on the premium charged to Mairead for a
new Term Assurance policy she is now taking out?
A Her smoking status
B The term of the policy
C Her gender
D Her age - ANS C
2.2.1 - Term Assurance
Convertible Term Assurance costs more than Term Assurance cover for the same term and
cover because:
A unhealthy lives are more likely to exercise the conversion option than healthy ones
B the Convertible Term Assurance policy pays more commission than the Term Assurance
policy
C policyholders can get income tax relief on the Convertible Term Assurance premium
D healthy lives are more likely to exercise the conversion option than unhealthy ones - ANS
A
2.2.2 - Convertible Term Assurance (CTA)
Joe has a Convertible Term Assurance policy which is about to end in a few months' time. If Joe
decides NOT to exercise the conversion option:
A he can continue the cover for at least three months after the end of the policy term
B he will receive a small cash payment and the policy will then end without benefit at the end of
the policy term
, C the cover ceases immediately on notification to the life company that the conversion option is
not being exercised
D the policy will end with no benefit at the end of the policy term - ANS D
2.2.2 - Convertible Term Assurance (CTA)
The MAXIMUM age to which Pension Term Assurance cover can run is:
A 65
B 70
C 75
D 80 - ANS C
2.2.3 - Pension Term Assurance
A regular income benefit policy is which one of the following types of Term Assurance policies?
A Convertible
B Decreasing
C Increasing
D Unit-linked - ANS B
2.2.4 - Regular Income Benefit
Which one of the following is a risk for an individual mortgage protection policyholder?
A The cover payable on death may be insufficient to fully pay off the outstanding mortgage at
that time
B The life company could increase the premium
C The life company could stop the cover before the end of the term
D Mortgage interest rates could fall from their current level - ANS A
2.2.5 - Mortgage Protection
A mortgage protection policy is which type of Term Assurance?
A Level
B Decreasing
C Increasing
D Pension - ANS B
2.2.5 - Mortgage Protection
Exam Questions And Answers
A need to provide for the financial impact of certain unpredictable events, which may cause an
interruption in a client's earned income, is which type of personal financial need?
A Savings
B Investment
C Protection
D Loan - ANS C
1.1 - Main types of personal financial needs
The primary financial need of a typical couple in their early 30s is likely to be:
A Serious Illness cover
B Lump sum Investment
C Retirement Planning
D Saving for a deposit to obtain a home loan to purchase property. - ANS D
1.3 - Life Cycle
A life assurance policy taken out to pay off taxes arising on death is which type of policy?
A Savings
B Investment
C Protection
D Loan - ANS C
1.4 - Life assurance policies to meet financial needs
Which one of the following restrictions usually applies to the exercise of an insurability option on
a life assurance policy?
A The life assured must be in good health at the time of exercise of the option
B The option must be exercised before a specified age
C The life assured must have paid premiums on the policy for at least 10 years
D The policy must have an encashment value at the time of exercise of the option - ANS B
,2.4 - Ancillary/Optional Benefits
Allister has a Term Assurance policy for €250,000 life assurance cover. The policy also provides
an equivalent level of terminal illness cover.
If Allister makes a successful terminal illness claim on the policy, what happens to the policy
after payment of the terminal illness claim?
A It continues with €250,000 life cover, subject to the continued payment of the premium
B It is made paid up with a reduced level of life cover
C It is made paid up at €250,000 life cover, with no further premiums to pay
D It is terminated by the life company - ANS D
2.47 - Ancillary/Optional benefits
Which one of the following factors will NOT impact on the premium charged to Mairead for a
new Term Assurance policy she is now taking out?
A Her smoking status
B The term of the policy
C Her gender
D Her age - ANS C
2.2.1 - Term Assurance
Convertible Term Assurance costs more than Term Assurance cover for the same term and
cover because:
A unhealthy lives are more likely to exercise the conversion option than healthy ones
B the Convertible Term Assurance policy pays more commission than the Term Assurance
policy
C policyholders can get income tax relief on the Convertible Term Assurance premium
D healthy lives are more likely to exercise the conversion option than unhealthy ones - ANS
A
2.2.2 - Convertible Term Assurance (CTA)
Joe has a Convertible Term Assurance policy which is about to end in a few months' time. If Joe
decides NOT to exercise the conversion option:
A he can continue the cover for at least three months after the end of the policy term
B he will receive a small cash payment and the policy will then end without benefit at the end of
the policy term
, C the cover ceases immediately on notification to the life company that the conversion option is
not being exercised
D the policy will end with no benefit at the end of the policy term - ANS D
2.2.2 - Convertible Term Assurance (CTA)
The MAXIMUM age to which Pension Term Assurance cover can run is:
A 65
B 70
C 75
D 80 - ANS C
2.2.3 - Pension Term Assurance
A regular income benefit policy is which one of the following types of Term Assurance policies?
A Convertible
B Decreasing
C Increasing
D Unit-linked - ANS B
2.2.4 - Regular Income Benefit
Which one of the following is a risk for an individual mortgage protection policyholder?
A The cover payable on death may be insufficient to fully pay off the outstanding mortgage at
that time
B The life company could increase the premium
C The life company could stop the cover before the end of the term
D Mortgage interest rates could fall from their current level - ANS A
2.2.5 - Mortgage Protection
A mortgage protection policy is which type of Term Assurance?
A Level
B Decreasing
C Increasing
D Pension - ANS B
2.2.5 - Mortgage Protection
