#1
What is a life settlement?
A financial transaction where a policyholder sells their life insurance policy to a third party
ExplanationPolicyholder sells life insurance policy to third party.
#2
What is the primary reason someone might consider a life settlement?
To receive a lump sum cash payment
ExplanationTo receive lump sum cash payment.
#3
Which factor typically determines the value of a life settlement?
The policyholder's age and health
ExplanationValue determined by policyholder's age and health.
#4
What is the 'life settlement broker' responsible for in the life settlement process?
Negotiating the sale of the policy
ExplanationResponsible for negotiating policy sale.
#5
What is the 'insurable interest' requirement in life settlements?
The policyholder must have a financial interest in the continued life of the insured
ExplanationPolicyholder must have financial interest in insured's life.
#6
What is the 'two-year contestability period' in the context of life insurance policies?
A period during which the insurance company can contest the policy's validity
ExplanationPeriod for contesting policy's validity by insurance company.
#7
What is a 'life settlement provider'?
A company or individual purchasing life insurance policies from policyholders
ExplanationCompany or individual purchasing policies from policyholders.
#8
What is the 'accelerated death benefit' in the context of life insurance policies?
A benefit that allows the policyholder to receive a portion of the death benefit while alive
ExplanationAllows policyholder to receive part of death benefit while alive.
#9
In the life settlement process, what is the 'life settlement broker' compensated for?
By receiving a percentage of the life settlement proceeds
ExplanationCompensated with percentage of settlement proceeds.
#10
What is the primary difference between a life settlement and a surrender of a life insurance policy?
The involvement of a third-party buyer
ExplanationDifference is involvement of third-party buyer.
#11
What is the purpose of a 'life settlement calculator'?
To estimate the value of a life settlement
ExplanationEstimates the value of a life settlement.
#12
What is the viatical settlement industry related to?
Selling life insurance policies of terminally ill individuals
ExplanationSelling policies of terminally ill individuals.
#13
In a life settlement, who is the typical buyer?
A third-party investor or company
ExplanationTypical buyer is third-party investor or company.
#14
What happens if the insured person outlives the life expectancy predicted during a life settlement?
The buyer receives additional payments
ExplanationBuyer receives additional payments if insured outlives expectancy.
#15
How are life settlements regulated?
Through state regulations
ExplanationRegulated through state regulations.
#16
What is the key distinction between a life settlement and a viatical settlement?
The health condition of the insured
ExplanationKey distinction is insured's health condition.
#17
How does taxation generally work for life settlements?
Taxation is similar to regular income
ExplanationTaxation similar to regular income.
#18
What is the 'life settlement market'?
The financial market where life settlements are traded as commodities
ExplanationFinancial market for trading life settlements.
#19
What is the role of a 'life expectancy provider' in the life settlement industry?
To predict the life expectancy of insured individuals
ExplanationPredicting life expectancy of insured individuals.
#20
What is a 'senior life settlement'?
A life settlement for individuals above a certain age
ExplanationSettlement for individuals above certain age.
#21
What is the 'retained death benefit' option in a life settlement?
The option for the policyholder to retain a portion of the death benefit
ExplanationOption to retain portion of death benefit.
#22
What is the role of a 'life settlement fund'?
To invest in life insurance policies
ExplanationInvesting in life insurance policies.
#23
What is the 'incontestability clause' in a life insurance policy?
A clause stating the policyholder cannot contest the policy's validity
ExplanationClause preventing policyholder from contesting validity.
#24
What is the role of a 'life settlement underwriter'?
To assess the financial risk of a life settlement transaction
ExplanationAssesses financial risk of settlement transaction.
#25
How does the 'viator' differ from the 'policyholder' in a life settlement?
The viator is the insured, and the policyholder is the beneficiary
ExplanationViator is insured, policyholder is beneficiary.