CII Certificate in Insurance IF3 Practice Test 2026 – All-in-One Guide to Master the Insurance Underwriting Process!

The correct answer, personal travel insurance, is subject to Insurance Premium Tax (IPT) at a rate of 20% in the UK. This class of insurance covers individuals for unexpected expenses or losses incurred while traveling, and the application of IPT aligns with regulatory measures aimed at funding public services.

In terms of regulatory compliance, insurers must incorporate IPT into the pricing structure of personal travel insurance policies, ensuring that customers are aware of the additional costs associated with the coverage.

Motor insurance typically has varying rates for IPT depending on specific criteria and is not uniformly charged at the 20% rate for all policies. Health insurance may also have different implications for IPT, often influenced by its categorization under public health provisions. Extended warranty insurance, while it might seem similar to other product-related insurances, usually falls outside of the direct purview of IPT in the same way as personal travel insurance.

Thus, personal travel insurance stands out as the class of insurance that specifically mandates the application of a fixed IPT rate of 20%.