Learning Material Sample

Financial protection

1. Consumer and market factors and trends relevant to financial protection

Learning outcome 1 Understand the consumer and retail market factors and trends relevant to financial protection

Course content

The course material consists of:

11 chapters of study text

Several test your knowledge questions in each chapter

Audiovisual presentations and audio for chapters 1, 2 and 4 to help get your studies off to a flying start

Revision assessments for each chapter to help confirm ...

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...e with the course.

CPD credit

You will be credited with the CPD times listed within the revision test sections. This will be added to your CPD certificate when you complete each assessment. Your CPD certificate can be viewed and printed from the CPD certificate link on the left hand menu at any time.

As well as acting as training module to help you pass the exam this online course can also be used for CPD.

By studying each chapter and then taking the end of chapter assessment this will create an entry on your CPD certificate containing:

Your personal details

Course name

Chapter name

Assessment results for each chapter

Estimated CPD time for each chapter.

After taking a chapter assessment if you go to the CPD certificate link you can produce a CPD certificate. By selecting the date filter you can choose which items to include on your certificate. You can also downloa...

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...CA could levy a fine on them, suspend them or even decide to remove their approved person status, although it could also agree to an action plan to be undertaken before reinstatement.

FCA monitoring

Firms are obliged to inform the FCA if any of their advisers fall below its competence or ethical standards.

The FCA collects information about individual advisers, such as the qualifications they hold and which accredited body they use. The FCA uses this database to help identify the highest risk individuals.

Content details - this document (PDF) contains details of the course.

Audiovisual presentations

Where we have created an audiovisual presentation you can view it in a new window by clicking on the image that appears at the top of the section. As detailed in the contents and information page before purchasing  this module there are a selection of animated audiovisua...

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...ustry as a whole - coupled with an evolving social and economic environment and advances in medical science - have provided challenges for the financial protection market. This chapter considers these changes and how the financial protection market has adapted to meet the challenges presented.

All risks can be categorised by assessing the severity of the impact and the probability of occurrence. Once assessed decisions can be taken as to whether the risks can be managed (e.g. by taking preventative action or where the impact can be met using available resources) or insured (e.g. where the likelihood of the event is low but the financial impact could be high).


Fred and Freda are married with four children. Fred is 40 and in good health, he works full-t...

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...39;rainy day' money).

The cost and availability of insurance would also be a factor. In some circumstances it may not be cost effective to insure a risk, for the product provider or for the client.

Lucy is a make-up artist working in the film industry. Her working pattern is irregular, usually three to four months of work at a time followed by periods of unemployment. Comment on the feasibility of insuring Lucy against the impact of unemployment.

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The social and economic landscape of the UK has changed drastically over the last 50 years and continues to evolve. The traditional lifestages that most people would have expected, i.e. childhood, education, marriage, children and retirement are no longer typical. Attitudes to marriage, divorce, sexuality, equality and bringing up children have all changed.

Changing demographics have meant that the attitudes to insurance have also changed. Some of the fact...

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...se, many other factors which influence public attitudes and behaviours. Swiss Re conduct consumer research each year, the findings of which are summarised in their annual Insurance Report. This research provides a valuable insight into public opinions and perceptions of the Insurance Industry and a study of historical reports can identify changes and trends.

What impact have changing family dynamics had on financial planning?

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The UK is the third largest market for life insurance in the world; however, Swiss Re has calculated that the Protection Gap (shortfall in the amount required to maintain the current standard of dependents) is currently £2.4 trillion. The deficit is due to many factors, including limited budgets, personal views and no interaction with qualified practitioners who can m...

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... number of houses sold has had an impact on the number of life and CI products that were sold for mortgage protection

Economic Factors - the level of income and inflation will effect the level of disposable income available

Dependants – do they exist and what are their ages

What is the “Protection Gap”?

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Our general standards of living have improved dramatically over the last 50 years, with better...

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...n terms are extended to match longer term liabilities, this will also present underwriting issues.

The main factors which have recently effected product design and pricing are the use of health and lifestyle factors and the use of technology to set pricing policy:

Smoker/non-smoker rates - there is strong evidence to show that non-smokers have significantly reduced mortality and morbidity when compared with smokers. Substantial discounts have therefore been offered for non-smokers

Preferred life policies - a form of positive selection where individuals whose lifestyles promote better health and fitness can obtain greater discounts, e.g. an active occupation may o...

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...refore rated and different groups are created within the overall portfolio of insured lives. Some treated advantageously will pay very low premiums but others, often with moderate health concerns, will not benefit from the rate reductions that should be available. A higher number of cases are also likely to be declined.

Since 21 December 2012, insurers cannot charge different premium rates for males and females, due to an EU gender directive.

What impact have improved mortality rates and cheaper premiums had on underwriting practices?

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The industry believes that ‘life assurance is sold and not bought’ and over the last 60 years the interest in purchasing it has declined. The system in the 1950s of salesmen going door-to-door, selling and collecting premiums, has long since disappeared as companies realised there were more effective ways of doing business.

After the changes to the provision of advice from the Retail Distr...

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...s substantial, there is still huge potential for growth, but it is constantly faced with challenges that impact on an ever-increasing protection gap.

State three disadvantages of purchasing protection from an online channel.

The online channel cannot:

Give advice on how to set a policy up

Explain the differences between different types of policy

Give advice on placing policies in trust

The protection market in the UK is large in comparison with the ...

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...hip that can follow from death, illness and other unforeseen events.

NOTE - These questions are designed for revision purposes only and are therefore n...

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...etake the test then additional CPD time for the test will be added to your CPD certificate.

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