What is true life settlement?

A life settlement refers to the sale of an existing insurance policy to a third party for a one-time cash payment. Payment is more than the surrender value but less than the actual death benefit. … By doing so, they receive the death benefit when the insured dies.

What is a life settlement contract?

A life settlement is the sale of a life insurance policy to a third party called a life settlement provider. The owner of the life insurance policy sells the policy to the life settlement provider and receives an immediate payment in return.

What is a life settlement contract quizlet?

Life Settlement Contract. establishes the terms under which the life settlement provider will pay compensation to the policy owner in return for the assignment, transfer, sale or release of any portion of the death benefit, policy ownership, beneficial interest or interest in a trust.

Which of the following best defines the owner of a life settlement?

Which of the following best defines the owner of a life settlement contract? The term “owner” refers to the owner of the policy who may seek to enter into a life settlement contract.

Which policies Cannot be sold as part of a life settlement?

Standard term policies and premium financed policies generally do not qualify for life settlements, because of the additional risk to the investor. Group life insurance policies can also qualify, if they are permanent or convertible term policies (and are actually transferable in the first place).

Is a life settlement A security?

A life settlement investment often constitutes a “security” under the investment contract test and may be deemed a security on an alternative basis.

Which of the following best defines the owner of a life settlement contract quizlet?

Terms in this set (26) Which of the following best defines the “owner” as it pertains to life settlemetn contracts? The policy owner of the insurance policy.

Which of the following is not considered to be an unfair claims settlement practice?

All of the following, if performed frequently enough to indicate a general business practice, are unfair claims settlement practices, EXCEPT: Requiring submission of preliminary claim report or a formal proof of loss before paying a claim is standard practice and not an unfair claim practice.

Which of the following is not an example of a business use of life insurance?

Which of the following is NOT an example of a business use of Life Insurance? Workers Compensation is a benefit payable when a worker is injured by a work-related injury, regardless of fault or negligence. It is not considered a business use of insurance.

What statement is not true regarding a straight life policy?

Which statement is NOT true regarding a Straight Life policy? Its premium steadily decreases over time, in response to its growing cash value. Which Universal Life option has a gradually increasing cash value and a level death benefit? Which of the following best defines target premium in a universal life policy?

Which of the following is true regarding credit life insurance?

All of the following are true regarding credit life insurance, EXCEPT: As the debt is paid off, the face amount decreases to match the amount of the debt. … Credit life policies usually are issued for a period of 10 years or less. Other forms of life insurance, aside from credit life, may be used to cover a debt.

Which of the following are examples of third party ownership of a life insurance policy except?

All of the following are examples of a third-party ownership EXCEPT: S applies for a policy on herself and names her husband as the beneficiary. Third-party ownership exists when the insured and the owner of the policy are different persons. A business owner buys a life policy on his own life.

Which of the following is not true regarding the annuitant?

Which of the following is NOT true regarding the annuitant? The annuitant cannot be the same person as the annuity owner. A deferred annuity is surrendered prior to annuitization.

Which of the following is not an allowable 1035 exchange?

So what is not allowable in a 1035 exchange? Single Premium Immediate Annuities (SPIAs), Deferred Income Annuities (DIAs), and Qualified Longevity Annuity Contracts (QLACs) are not allowed because these are irrevocable income contracts.

Which of the following are generally not considered when underwriting group insurance?

Which of the following are generally NOT considered when underwriting group insurance? The insureds’ medical history (Group life insurance is written on a group, not individual basis. … Generally, medical questions are not necessary.)

Which if the following is not true regarding the life with guaranteed minimum annuity settlement option?

Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option? It does not guarantee that the entire principal amount will be paid out. They invest on a more aggressive basis aiming for higher returns.

Which of the following is not considered a rebate?

Which of the following is not considered a rebate? Various payment or budget plans are not considered rebating. Rebating is an illegal activity.

Which settlement options does not guarantee that the entire principal?

Which of the following settlement options does NOT guarantee that the entire principal will be paid out to the beneficiary? The life-income option provides the recipient with an income that he or she cannot outlive. However, this settlement option does not guarantee that the full principal will be paid out.

What are the disadvantages of annuities?

  • Annuities Can Be Complex.
  • Your Upside May Be Limited.
  • You Could Pay More in Taxes.
  • Expenses Can Add Up.
  • Guarantees Have a Caveat.
  • Inflation Can Erode Your Annuity’s Value.
  • The Bottom Line.

Which of the following annuities does not have a traditional accumulation phase?

Immediate annuities, also known as income annuities, don’t have an accumulation phase because they are annuitized at the time of purchase. This is true even of deferred income annuities (DIAs), which defer income payments beyond the one-year mark that is typical of immediate annuities.

Which of the following is true regarding an annuity?

The correct answer is c) An annuity due is an equal stream of cash flows paid or received at the beginning of each period.