Generic Questions Flashcards
Key info required for cash flow modeller
8 points
Current income / future income needs
Planned capital expenditure
Current assets / guaranteed income
Growth rate assumptions / interest rate assumptions
Inflation assumptions
ATR
Longevity
Stress Testing
Cash Flow Modeller Limitations
9 points
Snapshot only
Inflation assumptions can be incorrect
Growth assumptions can be incorrect
Circumstances may change
Legilsation may change
ATR may change
Charges may change
Regular reviews required
Input errors
Benefits / Drawbacks of CIC over ASU policy
6 ads 5 disads
Can’t be cancelled
Can claim until retirement
Own occupation available
Indexation
Proportionate Benefits
Guaranteed premiums
More Expensive
Longer deferment period
Does not cover unemployment
No lump sum benefits
Stricter underwriting
Key differences between Income Protection and CIC
14 points
Income is tax-free regular income
CIC is tax free lump sum
Income pays on inabilty to work due to accident or sickness
CIC pays on listen illnesses only
IP allows multiple claims, can only claim CIC once
Cover decreases over term for IP
Potential longer term cover for CIC
IP limited to % of salary
IP has deferment period
IP based on occupation definitions e.g. own occupation
CIC can have life cover element
Other benefits with CIC e.g. kids cover
Ip required more detailed underwriting
CIC can be setup under trust
Explain PLA
8 points
Lump sum is paid to insurance company
This is irrevocable
Annuity rate agreed for fixed term
Income paid as mixture of capital and income
Return of capital is tax-free
Income is taxable as savings income
can use PSA
Escalation availablke
Benefits of Platform
9 points
24/7 access
Total wealth can be seen instantly
Wide range of providers
Performance is easy to see
Get full details of investment
Automatic tax statements
Reduced paperwork
Automatic rebalancing
Transparent Charging
