#1
What is a Life Settlement?
A financial transaction involving the sale of a life insurance policy
ExplanationSale of life insurance policy for financial gain.
#2
What is the minimum age for a policyholder to be eligible for a Life Settlement?
65 years
ExplanationPolicyholders must be 65 or older.
#3
What is the primary reason a policyholder might consider a Life Settlement?
To receive accelerated death benefits
ExplanationTo receive accelerated death benefits.
#4
What is the typical term for the 'contestability period' in life insurance policies?
2 years
ExplanationContestability period typically 2 years.
#5
What is the primary difference between a Life Settlement and a Viatical Settlement?
The presence of terminal illness in the insured
ExplanationPresence of terminal illness.
#6
Which regulatory body oversees Life Settlements in the United States?
National Association of Insurance Commissioners (NAIC)
ExplanationNAIC regulates Life Settlements in the US.
#7
What is the viatical settlement industry?
A financial transaction involving the sale of a life insurance policy by a terminally ill person
ExplanationSale of life insurance policy by terminally ill for financial gain.
#8
Which document is commonly required during a Life Settlement transaction?
Policy illustration
ExplanationPolicy illustration is often required.
#9
What is the 'death benefit' in the context of life insurance policies?
The financial benefit received after the death of the insured
ExplanationFinancial benefit after insured's death.
#10
Which party typically purchases a life insurance policy in a Life Settlement?
Life Settlement broker
ExplanationLife Settlement brokers typically purchase policies.
#11
What is a 'Life Settlement Broker' responsible for?
Negotiating the sale of a life insurance policy
ExplanationNegotiating sale of life insurance policies.
#12
In the context of Life Settlements, what does 'viability' refer to?
The health status of the insured
ExplanationHealth status of the insured individual.
#13
What is the purpose of a Life Settlement Provider License?
To facilitate life settlement transactions
ExplanationLicense to facilitate life settlement transactions.
#14
Which factor is crucial in determining the market value of a life insurance policy in a Life Settlement?
The life expectancy of the insured
ExplanationLife expectancy of the insured is crucial.
#15
In the United States, which state has been a pioneer in regulating Life Settlements?
Florida
ExplanationFlorida is a pioneer in regulating Life Settlements.
#16
In a Life Settlement, what does 'net amount at risk' refer to?
The difference between the policy face value and cash surrender value
ExplanationDifference between face value and cash surrender value.
#17
Which federal law governs the taxation of Life Settlement proceeds in the United States?
Internal Revenue Code Section 101(g)
ExplanationTaxation governed by Internal Revenue Code.