Mock GRID Exam

Mock GRID Exam

GRID Exam, especially for Debbie! Because Kelly and Becky are awesome!!

published on August 22, 201130 responses 0 4.0★ / 5

What type of scheme allows members to select their own benefits?

Select the one correct answers
Flexible Benefits scheme
DB Pension Scheme
Group Life Scheme
Group Income Protection scheme

What is the benefit of a discretionary Trust?

Select the one correct answers
All employees are authorised to receive information on the scheme
Beneficial Tax treatment
All employees can opt for flexible benefits
Discounts can be made on the annual premiums

Which of these is not an FSA objective?

Select the one correct answers
Maintain confidence in the financial system
Promote public understanding of the financial system
Reduce financial crime
Increase the wealth of the financial system

Why are clearly defined eligibility criteria important?

Select the one correct answers
To avoid being discriminatory
To avoid anti selection
It’s a requirement when registering the scheme
It’s an FSA requirement

Typically under group life insurance temporary absence cover in the case of illness and injury will be provided:

Select the one correct answers
For 3 years
Until normal retirement age
Until the next renewal date
Indefinitely

Which of the following should an IFA take into account when recommending insurers?

The commission offered
B. How many schemes they currently hold with the insurer
The premium offered
The insurers share price

Which of the following is not a way of committing fraud under the Fraud Act 2006?

Fraud by false representation
Fraud by abuse of position
Fraud by use of internet technology
Fraud by failing to disclose information

If Debbie earns £30,000 a year with benefits in kind of £500, how much of her salary will be taxed (tax year 2010/2011)?

£5,975
£24,025
£24,525
£30,000

Which of these is not part of the ABI’s statement of best practice for Critical Illness cover?

Having a common format in the way critical illness cover is described to potential buyers at the point of purchase
The use of common generic terms
To provide policy wording to all members
The use of model wording for critical illness and exclusions

When will medical underwriting not be required?

Where benefits exceed the free cover limit
When the member is over age 65
Where the member has discretionary benefits
When the member is a discretionary entrant

If a policy is called critical illness cover it must cover at the very least which of the following conditions:

Cancer, Heart attack, Stoke
Cancer, Heart attack, diabetes
Heart attack, HIV, Alzheimer’s
Parkinson’s, Terminal Illness, Coma

In a reinsurance treaty contract between a reinsurer and an insurer the insurer is often referred to as the:

Procurer
Cedant
Client
Administrator

If an intermediary is not authorised by the FSA:

The insurer can only provide information
The insurer cannot deal with them
The insurer may only issue a quote
The insurer must obtain authority to deal with them from the trustees

Which of the following is an example of anti-selection?

Selecting an insurer based on who offers the lowest premiums
Having an eligibility period on the scheme
Joining a scheme within the eligibility requirements
Joining a group life or critical illness scheme after being diagnosed with cancer

Who must register a group risk scheme with the HMRC?

The Insurer
The Trustees
The Scheme Administrator
The Intermediary

What is the single persons allowance for an under 65 (tax year 2010/2011)?

£9,490
£6,475
£7,475
£6,965

An intermediary who can advise on a limited range of product providers is known as…?

A. Single Tied Agent
B. Multi-Tied Agent
C. Whole of the Market Advisor
D. Independent Financial Advisor

Which of the following is not a benefit of reinsurance?

Catastrophe cover
Spreading risk
Stability
Reducing medical underwriting

What does a catastrophe limit do?

Provide cover in the event of a catastrophe
Limit the number of claims following a catastrophe
Limit the amount of benefit paid following a catastrophe
Provides insurers with an exemption on paying claims on catastrophe’s in certain areas

When may cover be provided to employees working overseas?

Always
As long as the employee has a UK contract of employment
As long as the employee is paid in Pounds Sterling
Never

Which of these is not subject to income tax?

Employed earning
Pensions
Interest on national savings certificates
Trust Income

Which of these is not part of the pathways to work process?

A. Personal capability assessment (PCA)
B. Mandatory volunteer work
C. Access to ‘Choices’ programmes
D. Return to work credits

If a member has a salary of £25,000 with lump sum benefits of 4 times salary and a death in service pension of 25%. What is their total capitalized benefit. The cap factor on the scheme is 30.

£287,500
£250,000
£125,000
£3,187,500

Which one of these is not a Group Risk benefit?

Group Life
Group Income Protection
Group Personal Pension
Group Critical Illness

How long must maternity payments be made for provided the employee has previously worked for her employer for at least six months and they earn enough to pay class 1 NIC’s.

36 weeks
39 weeks
46 weeks
52 weeks

What type of group life benefit payment will result in a benefit crystallisation event?

Payment of a death in service pension
Payment of a registered lump sum benefit
ayment of a death in service pension and lump sum benefit
Payment of an excepted lump sum benefit

In a compensation claim which can the FOS not award as redress?

A Money Award up to £500,000
To pay an insurance claim that had previously been rejected
To calculate and pay redress according to an approach or formula set by the regulator
To personally apologise to the customer

Which of the following is not a Group income protection benefit basis available?

Non-integrated benefits
Partially integrated benefits
Fully integrated benefits
Variable integrated benefits

Why might an excepted policy be set up?

To make administration simpler
HMRC approval was rejected
Members have benefits over the lifetime allowance
If approval was not obtained in the designated time

When issuing a formal quotation to an intermediary, an insurer must also issue which of the following:

Policy Schedule
Scheme Authorisation form
Technical guide
Trustee Proposal

When might an insurer cost a scheme on a single premium costing basis?

When a scheme has over 20 lives
When a scheme has under 20 lives
When a scheme has a high claim history
When a schemes average age exceeds 50

Which of these is not a reason a company would set up a captive insurance company?

Captives get similar tax benefits to commercial insurance companies
Companies do not pay premiums to captive insurance companies
Premiums paid may be eligible for tax relief
Captives can cover risks that an insurance company may decline to cover

When does the financial year for corporate tax run from?

6th April-5th April
1st January – 31st December
1st July – 30th June
1st April – 31st March

What is the current life time allowance?

£129,600
£255,000
£1,500,000
£1,800,000

Which of the following is not a permitted activity for intermediaries regulated by the FSA?

Advising clients on insurance contracts
Negotiating best terms on insurance contracts
Assistance in the administration and performance of insurance contracts
Making claims on behalf of the claimant

When should an intermediary provide its client with a demands and needs statement?

Before the conclusion of the insurance contract
Before obtaining a quote
Before a claim is made
Before the first premium is made

On a Group Life scheme why might having a large number of long term absentees increase the premium?

Because they are not available for medical underwriting
Because they may have higher salaries
Because there is unknown risk
Because there is a great risk of a claim being made

Who will pay out on a group income protect policy when cover switches to another insurer when a claim is already in force?

The trustees
The existing insurer
The new insurer
The Employer

Which of these is not a trust based scheme?

Defined Benefit scheme
Career averaged earnings (CARE) schemes
Occupational defined contribution (money purchase) scheme
Group personal pensions (GPP)

Pre-existing condition exclusions are commonly used on which product?

Group Life
Group Critical Illness
Group Income Protection
Group Pension Schemes

Once cover has been agreed the insurer will require which of the following paperwork:

A proposal form
A scheme Authorisation form
An application form
Expression of wishes forms

On a unit rate scheme the sum insured is £2,000,000 and the unit rate is 1.37‰ what is the premium?

£274,000
£27,400
£2,740
£274

In group income protection what is the deferred period?

A period of cover after the normal retirement age
A period of time after inception before premiums have to be paid
A period of time an employee must be absent for before benefits will be paid
The maximum period benefits will be paid for

Which one of the below can a group life scheme not attach to?

Define Benefit Pension scheme
Group Money Purchase Scheme
Final Salary Scheme
Group Personal Pension

Which of the following is not a key component of a group income protection policy?

Clearly defined eligibility
Definition of disability
Deferred retiree category
The benefit in payment escalation rate

Which of the following is not required when making a claim for a spouses pension?

Fully completed claim form
Original death certificate
Original marriage certificate
Morticians report

Who may be contractually obligated to provide an employee with group risk benefits?

The financial advisor
The Employer
The insurance company
The Employee

When obtaining a quotation an intermediary will need to provide accurate membership data. This should include:

Date of birth, pre-existing conditions and marital status
Date of birth, gender and whether members are smokers
Dates of birth, gender and number of children
Date of birth, gender and job title

Who is responsible for compliance with DPA principles?

Data Protection Officer
Senior Management
The FSA
Everyone

Why do insurance companies ask for a claims history when quoting?

It is useful on small schemes to predict future claims
It is useful on large schemes to predict future claims
It may be an indication that the duties the employees carry out are high risk
A scheme will have lost its no claims discount