[GR1] GR1 Group risk Certification Exam
Guide
**Question 1**. Which of the following best describes the primary purpose of Death‑in‑Service
(DIS) cover in a UK group risk scheme?
A) To provide a pension for retirees
B) To replace the employee’s income after a short‑term illness
C) To pay a lump‑sum benefit to nominated dependants on the employee’s death while
employed
D) To fund the employee’s private medical insurance
Answer: C
Explanation: DIS is designed to deliver a lump‑sum death benefit to the employee’s dependants
if death occurs during active service.
**Question 2**. The development of the UK group risk market in the 1970s was driven mainly
by:
A) The introduction of the Equality Act 2010
B) Employers seeking tax‑efficient ways to attract and retain staff
C) Changes to the European Union insurance directives
D) The rise of digital health platforms
Answer: B
Explanation: Employers adopted group risk products in the 1970s to enhance remuneration
packages while benefiting from corporation‑tax deductions.
**Question 3**. In a typical “Flex” scheme, which statement is true?
A) All employees must take the same level of cover
B) Employees can allocate a cash allowance across a menu of benefits, including group risk
products
, [GR1] GR1 Group risk Certification Exam
Guide
C) The scheme is only available to senior management
D) Flex schemes are prohibited under FCA rules
Answer: B
Explanation: Flex schemes allow staff to customise benefits by allocating a cash allowance
among options such as life, income protection, and health cover.
**Question 4**. Which of the following is NOT a core benefit offered in most group risk
schemes?
A) Critical Illness cover
B) Income Protection
C) Death‑in‑Service
D) Private Medical Insurance
Answer: D
Explanation: Private Medical Insurance (PMI) is considered an ancillary benefit, not a core risk
product.
**Question 5**. The “Work Capability Assessment” is used to determine eligibility for which UK
state benefit?
A) Statutory Sick Pay (SSP)
B) Employment and Support Allowance (ESA) – New Style
C) Universal Credit
D) Bereavement Support Payment
Answer: B
, [GR1] GR1 Group risk Certification Exam
Guide
Explanation: The Work Capability Assessment assesses whether claimants can work, forming
the basis for New Style ESA entitlement.
**Question 6**. Under UK law, which regulation governs the handling of employees’ medical
information by a group risk scheme?
A) Equality Act 2010
B) FCA Conduct of Business Sourcebook (COBS)
C) UK GDPR and Data Protection Act 2018
D) Financial Services Compensation Scheme (FSCS) Rules
Answer: C
Explanation: UK GDPR and the DPA 2018 set the standards for processing personal and health
data.
**Question 7**. Which principle of the FCA’s Consumer Duty is most directly related to
ensuring that group risk products are clear and understandable?
A) Products and Services
B) Governance
C) Communications
D) Financial Crime
Answer: C
Explanation: The Communications principle requires firms to provide information that is clear,
fair, and not misleading.
**Question 8**. A “Free Cover Limit” (FCL) in group life insurance refers to:
, [GR1] GR1 Group risk Certification Exam
Guide
A) The maximum amount of cover an employee can purchase without medical underwriting
B) The amount of cover the insurer will pay if the employee dies within 30 days of joining
C) The portion of premiums that are tax‑free for the employee
D) The limit on how many claims can be made in a policy year
Answer: A
Explanation: FCL is the level of cover offered automatically, without requiring medical evidence.
**Question 9**. Which of the following is a key difference between an Excepted Group Life
Policy (EGLP) and a Registered Group Life scheme?
A) EGLPs are subject to IHT on death benefits, whereas registered schemes are not
B) EGLPs have a maximum annual premium limit per employee of £5,000
C) EGLPs are exempt from FCA registration and have simpler tax treatment
D) EGLPs must be offered to all employees, while registered schemes can be selective
Answer: C
Explanation: EGLPs are “excepted” from FCA registration, making administration easier and
offering favourable tax treatment under certain limits.
**Question 10**. The “Own Occupation” definition of incapacity in Group Income Protection
(GIP) means:
A) The employee cannot perform any work at all
B) The employee cannot perform the specific duties of their current role, even if they could
work elsewhere
C) The employee is unable to work due to any medical condition for 12 months
Guide
**Question 1**. Which of the following best describes the primary purpose of Death‑in‑Service
(DIS) cover in a UK group risk scheme?
A) To provide a pension for retirees
B) To replace the employee’s income after a short‑term illness
C) To pay a lump‑sum benefit to nominated dependants on the employee’s death while
employed
D) To fund the employee’s private medical insurance
Answer: C
Explanation: DIS is designed to deliver a lump‑sum death benefit to the employee’s dependants
if death occurs during active service.
**Question 2**. The development of the UK group risk market in the 1970s was driven mainly
by:
A) The introduction of the Equality Act 2010
B) Employers seeking tax‑efficient ways to attract and retain staff
C) Changes to the European Union insurance directives
D) The rise of digital health platforms
Answer: B
Explanation: Employers adopted group risk products in the 1970s to enhance remuneration
packages while benefiting from corporation‑tax deductions.
**Question 3**. In a typical “Flex” scheme, which statement is true?
A) All employees must take the same level of cover
B) Employees can allocate a cash allowance across a menu of benefits, including group risk
products
, [GR1] GR1 Group risk Certification Exam
Guide
C) The scheme is only available to senior management
D) Flex schemes are prohibited under FCA rules
Answer: B
Explanation: Flex schemes allow staff to customise benefits by allocating a cash allowance
among options such as life, income protection, and health cover.
**Question 4**. Which of the following is NOT a core benefit offered in most group risk
schemes?
A) Critical Illness cover
B) Income Protection
C) Death‑in‑Service
D) Private Medical Insurance
Answer: D
Explanation: Private Medical Insurance (PMI) is considered an ancillary benefit, not a core risk
product.
**Question 5**. The “Work Capability Assessment” is used to determine eligibility for which UK
state benefit?
A) Statutory Sick Pay (SSP)
B) Employment and Support Allowance (ESA) – New Style
C) Universal Credit
D) Bereavement Support Payment
Answer: B
, [GR1] GR1 Group risk Certification Exam
Guide
Explanation: The Work Capability Assessment assesses whether claimants can work, forming
the basis for New Style ESA entitlement.
**Question 6**. Under UK law, which regulation governs the handling of employees’ medical
information by a group risk scheme?
A) Equality Act 2010
B) FCA Conduct of Business Sourcebook (COBS)
C) UK GDPR and Data Protection Act 2018
D) Financial Services Compensation Scheme (FSCS) Rules
Answer: C
Explanation: UK GDPR and the DPA 2018 set the standards for processing personal and health
data.
**Question 7**. Which principle of the FCA’s Consumer Duty is most directly related to
ensuring that group risk products are clear and understandable?
A) Products and Services
B) Governance
C) Communications
D) Financial Crime
Answer: C
Explanation: The Communications principle requires firms to provide information that is clear,
fair, and not misleading.
**Question 8**. A “Free Cover Limit” (FCL) in group life insurance refers to:
, [GR1] GR1 Group risk Certification Exam
Guide
A) The maximum amount of cover an employee can purchase without medical underwriting
B) The amount of cover the insurer will pay if the employee dies within 30 days of joining
C) The portion of premiums that are tax‑free for the employee
D) The limit on how many claims can be made in a policy year
Answer: A
Explanation: FCL is the level of cover offered automatically, without requiring medical evidence.
**Question 9**. Which of the following is a key difference between an Excepted Group Life
Policy (EGLP) and a Registered Group Life scheme?
A) EGLPs are subject to IHT on death benefits, whereas registered schemes are not
B) EGLPs have a maximum annual premium limit per employee of £5,000
C) EGLPs are exempt from FCA registration and have simpler tax treatment
D) EGLPs must be offered to all employees, while registered schemes can be selective
Answer: C
Explanation: EGLPs are “excepted” from FCA registration, making administration easier and
offering favourable tax treatment under certain limits.
**Question 10**. The “Own Occupation” definition of incapacity in Group Income Protection
(GIP) means:
A) The employee cannot perform any work at all
B) The employee cannot perform the specific duties of their current role, even if they could
work elsewhere
C) The employee is unable to work due to any medical condition for 12 months
