Life and Health - Life Insurance Basics
How much is a viatical settlement broker licensure
$100
How much is a viatical settlement provider licensure
$300
In life insurance the insurance company has two responsibilities which is to 1. issue policies to who 2. Pay a benefit to who
1 Issue policies to the policyowner 2.Pay benefit to the beneficiary
An exception to asset protection is if a creditor possessing a valid assignment from the policyowner may recover the amount secured by the assignment with interest from either what two things
1. Cash Surrender Value 2. Proceeds of the life insurance policy
A valid insurable interest may exist between the policyowner and the insured when the policy is insuring what three things
1. Policyowners life 2. The life of a family member, spouse or close blood relative 3.Life of a business partner, key employee or someone who has financial obligation to the policyowner
Viatical settlement producers must obtain what 3 pieces of information before entering into a contract
1. Witness Document 2. Document giving the insured's consent to release medical records to the viatical settlement provider, the broker and insurance company 3.A document giving the insured's consent to the tolling of the running of the policy's contestable period until after the insurer completes their good faith investigation, if the policy is being viaticated within 2 years of the policy issue
In terms of insurable interest of life insurance the Policyowner must face the possibility of what two things (can be ONE OR THE OTHER OR COULD BE BOTH)
1. losing Money 2. Losing something of value in the event of a loss
A Viator has how many calendar days to rescind a viatical settlement
15 days
An exception to asset protection is If the insured has filed bankruptcy within how many years, then the proceeds of the cash value are only exempt under certain circumstances
2 years
if the viatical settlement provider transfers ownership or changes the beneficiary of the insurance policy, the provider must inform the insured within how many days of that change
20 days
A disclosure must include that fund will be sent to the Viator within how many business days after the viatical settlement provider acknowledges the ownership of the policy or the interest in the certificate has been transferred and the beneficiary has been designated
3 business days
All viatical applications will be approved or disapproved by the department within how many days of their receipt
90 days
Viatical settlement provider means a person other than the Viator (the insured) that enters into what
A vatical settlement contract
Estate creation are good for young families who have not had time to do what
Accumulate Assets
The tendency of individuals with a higher probability of loss to purchase insurance more often than those who present a lower risk is defined as what?
Adverse Selection
Licenses may be renewed how often
Annually, on the anniversary month
Survivor Protection requires examination of what two things and overall one big thing?
Assets and Liabilities and what the survivors needs may be
Insurable interest must exist at the time of what??
At the time of the application
In the event of the insured's death, the insurer pays the death benefit to who
Beneficiary
Life insurance pays a death benefit upon the death of the insured to who
Beneficiary
Equity amount accumulated in permanent life insurance is defined as
Cash Value
A condition in which a person is unable to perform at least 2 activities!!!! of daily living or that requires substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment is defined as what
Chronically ill
Asset protection is the use of life insurance to guard ones wealth against
Creditor Claims
Life insurance protects against financial loss that is associated with an insured's what
Death
In a viatical settlement when the policy is purchased the new owner continues to maintain premium payments and will eventually collect the entire what
Death Benefit
the amount paid upon the death of the insured in a life insurance policy is defined as?
Death Benefit
Viatical settlement providers, and brokers must supply applicants with a WHAT that is signed by the provider, or broker or Viator
Disclosure
A person's net worth
Estate
The purchase of life insurance creates an immediate what
Estate
If the insured has a life expectancy of more than one (1) year how often is the viatical settlement producer or broker allowed to contact the insured about their health status
Every 3 months
An exception to asset protection is if the amount of premiums paid is with intent to defraud creditors is not what
Exempt
Life insurance protects against what type of loss
Financial Loss
An act or omission committed knowingly or with the intent to defraud for the purpose of depriving another property or for monetary gain by a person who commits or permits employees or agents to do so
Fradulent Viatical Settlement Act
Presentation or depiction of non guaranteed elements of a life insurance policy
Illustrations
The policy owner must have insurable interest in the what of the insured
In the life of the insured
Life insurance may be purchased by what two entities
Individuals or Businesses
To purchase insurance there must be what
Insurable Interest
The beneficiaries well being is dependent upon the
Insured
When the insured dies the the contractual agreement is between what two entities
Insurer and Beneficiary
Coverage on human lives
Life Insurance
When the owner of a life insurance policy sells a policy that is no longer needed to a third party for some form of compensation, usually cash that is referred to as
Life Settlements
Selling assets in order to raise capital
Liquidation
As a result of cash accumulation some life insurance policies offer what to the policy owner?
Liquidity
Payment of the entire benefit in one sum
Lump Sum
A person under legal age
Minor
Are Viatical Settlements policy options?
NO
Does the insured's creditors have the rights to the proceeds or cash value of the life insurance policy
NO
Can a viatical settlement provider be a bank
No
Can a viatical settlement provider be financing entity
No
Can a viatical settlement provider be the issuer of a life insurance policy providing accelerated benefits?
No
Does the term viatical settlement producer include a viatical settlement license
No
Is a viatical settlement producer a financing entity yes or no
No
Is a viatical settlement producer a special purpose entity yes or no
No
Is a viatical settlement producer an accredited investor, qualified buyer, or qualified purchaser who purchases a viaticated policy from a viatical settlement provider yes or no
No
Is a viatical settlement provider a related provider trust yes or no
No
Is insurable interest required of beneficiaries?
No
Is the beneficiaries life being insured yes or no?
No
Does the beneficiary need to show insurable interest for a policy to be purchased yes or no?
No.
If the insured has a life expectancy of one year or LESS how often is the viatical settlement producer or broker allowed to contact the insured about their health status
One year or less
Viators (the insured) receive a what of the policy's face value from the person who purchases the policy
Percentage
An insurance contract is between what two entities
Policyowner and insurer
Insurable interest must exist between what two parties at the time of the application
Policyowner and the insured
If the insured dies in the recession period, the settlement contract will be deemed as what
Rescinded
Ability to meet financial obligations (e.g. an insurance company maintains enough assets to pay claims)
Solvency
Life insurance that provides the funds necessary for the survivors of the insured to be able to maintain their lifestyle in the event of the insured's death is known as what
Survivor protection
Life insurance proceeds may be used to pay inheritance taxes and federal estate taxes, so that it is not necessary for the beneficiaries to sell off the assets TRUE OR FALSE
TRUE
There is no other legal method aside from Life Insurance that allows for an immediate estate to be created at such a small cost TRUE OR FALSE
TRUE
A condition (illness or sickness) that can reasonably be expected to result in death within 24 months!!!!
Terminally ill
In life insurance the policy owners responsibility is to a pay premium to who
The insurance company
The insurer issues a policy covering who
The insured
Viatical Brokers represent who
The insured
The policy owner of a life insurance contract pays a premium to who
The insurer
When an insured purchases a life insurance policy, they will have an estate for at least that amount the moment what is paid
The moment the premium is paid
Viatical producers represent who
The providers
Viatical settlements are separate contracts that the insured sells the death benefit to who and at what rate
Third Parties at a discounted rate
A disclosure must include that funds will be sent to the Viator within 3 business days after the viatical settlement provider acknowledges the ownership of the policy or interest in the certificate has been transferred and the beneficiary has been designated true or false
True
If someone is engaging in the business of viatical settlements as a provider or broker they must be properly licensed true or false
True
Once a life insurance policy has been ISSUED, the insurer must pay the policy benefit, whether or not an insurable interest exists True or False
True
The disclosure must contain proceeds subject to claims of creditors true or false
True
The disclosure must contain proceeds subject to claims of the creditor true or false
True
The disclosure must contain proceeds taxation information true or false
True
The disclosure must contain that a Viator has 15 calendar days to rescind viatical settlement. If the insured dies in the recession period, then the settlement contract will be deemed rescinded true or false
True
The disclosure must contain the effect on eligibility for medicaid or other government benefits true or false
True
The beneficiary receives benefit upon what of the insured
Upon the death of the insured
A licensed person that for a fee, negotiates vatical settlement contracts between the Viator(insured) and viatical settlement provider(person other than a Viator (an insured) entering into a viatical contract)
Viatical Settlement Broker
A person other than a Viator that enters into or effectuates a viatical settlement contract. This term does not include a bank, financing entity, or the issuer of a life insurance policy providing accelerated benefits
Viatical Settlement Provider
Anyone who gives a sum of money in consideration for a life policy or interest in the death benefits of a life insurance policy. It also means a person who owns, acquires, or is entitled to a beneficial interest in a trust settlement contract. This is defined as
Viatical Settlement Purchaser
What allows someone living with a life threatening condition to sell their existing life insurance policy and use the proceeds when they are most needed, before their death
Viatical Settlements
An audited financial statement not more than 1 year and 120 days old, and an unaudited financial statement (as of the end of the most recent quarter) is needed for the application of what
Viatical settlement license
The owner of a life insurance policy who enters into or seeks to enter into a viatical settlement contract
Viator
In Viatical's the insured are referred to as what
Viators
Within how many days of completing the contract, must the viatical settlement provider give written notice to the insurer that issued the insurance policy that the policy has or will become a viaticated policy
Within 20 days
If a life insurance policy has liquidity, meaning it has cash value, is that cash value able to be borrowed against at any time and used for immediate needs YES OR NO
YES
Is a viatical settlement provider or broker allowed to contact the insured to request information regarding the insured's health status yes or no
Yes
Viatical settlements are used for what kind of person
a person who is terminally ill
When there is liquidity in a life insurance policy that means the cash value can be what
borrowed against
A disclosure must include that that entering into a viatical settlement contract could cause other rights and benefits to be forfeited true or false
true
The disclosure must contain possible alternatives to viatical settlement contracts true or false
true
Do most states regulate policies that are sold to third parties for compensation under life settlement yes or no
yes
In life settlements can some sell their policy because they no longer need coverage, the costs have gone up too much, etc
yes