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9.1.1.1 Multiple choice questions: Indicate the letter at each question that is most correct.
i) Credit life insurance cover is primarily taken out for the following reason:
(a) To provide an income in time of retrenchment
(b) To pay outstanding debt in case of death, disability etc.
(c) To provide an income to family in case of death
(d) None of the above
ii) The amount that you owe to money lenders or creditors is known as:
(a) Debt
(b) Outstanding capital
(c) Outstanding interest
(d) None of the above
iii) Credit life, as a decreasing term policy, means that:
(a) The policy life cover stays the same and is paid out to beneficiaries in case of death
(b) The policy life cover increases to compensate beneficiaries in case of death
(c) As debt reduces, the policy life cover amount reduces
(d) None of the above
iv) The following events are usually covered in a credit life policy:
(a) Death
(b) Disability and/or dread disease
(c) Retrenchment
(d) All of the above
v) The following can happen when a client refuses to take out credit life cover when purchasing a large item on credit:
(a) The client’s family will be responsible for outstanding debt in case of death, disability or retrenchment
(b) The retailer or financial institution can refuse to approve the client’s loan without credit life insurance
(c) The financial institution will write off any outstanding debt in case of death or disability of the client
(d) A & b
vi) The following is part of the terms and conditions of a credit life insurance policy:
(a) Going for an overall health check-up
(b) Disclosure of pre-existing conditions
(c) A HIV/Aids test
(d) None of the above
vii) When taking out a credit life insurance policy, the policy is usually ceded to:
(a) The creditor or lender
(b) The retail outlet
(c) The beneficiaries of the policy
(d) None of the above
viii) With this type of insurance policy, your life cover will continue even if you stop paying your premiums at a predetermined age (60, 65 or 85 years):
(a) Term life cover
(b) Universal life cover
(c) Whole life cover
(d) All of the above
ix) A Level Term insurance policy is usually taken out in the following event:
(a) When your child goes to university, to ensure that he/she can continue with studies in the case of your death
(b) When buying a new car, to ensure that the outstanding debt is paid in case of your death
(c) When foreseeing that you will be retrenched in your job, to compensate for the period of unemployment
(d) None of the above
x) The two legislations that has the most crucial impact on credit life insurance is:
(A) FAIS & FICA
(b) Short Term Insurance Act & FICA
(c) Long-term Insurance Act & Short-Term Insurance Act
(d) National Credit Act & Long-term Insurance Act
This response will be reviewed and graded after submission.
This response will be reviewed and graded after submission.
9.1.3.1 List at least four (4) events that are usually covered in a credit life insurance policy.
This response will be reviewed and graded after submission.
9.1.4.1 Explain the consequence(s) if a claim on a client’s credit life insurance policy is not paid out. Mention the possible consequence(s) for the client as well as the retail outlet/financial institution.
This response will be reviewed and graded after submission.
Criteria |
Credit Life policy |
Cover |
|
Payment of claims |
|
Beneficiaries |
|
Table 6
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9.1.6.1 Write notes on the general exclusions found in credit life insurance policies.
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9.1.7.1 Explain the benefits that a credit life insurance policy has for a client.
This response will be reviewed and graded after submission.
The REready! Pack is designed to be used to prep for RE1 or RE5 or both.
The content for RE1 and RE5 overlaps as both exams test your practical knowledge of the FAIS Act and FICA.
The class is not a facilitator that is going to read the law out of a book for you.
Anna Bouhail contextualizes the content and creates an understanding of basic concepts related to law, the industry, and competency exams.
The class is structured to also instill compliance skills allowing the learner to answer practical questions.