Retirement and Other Insurance Concepts
After a life settlement closes, who owns the policy and who is responsible for the premiums?
Answer and explanation
Answer: D. A completed life settlement transfers ownership and the beneficiary designation to the buyer, who assumes the premium obligation and collects the death benefit when the insured dies.Source: NAIC Life Insurance Buyer's Guide — Life settlements: transfer of ownership and premium duty
More retirement and other insurance concepts questions
- How does an entity-purchase buy-sell plan differ from a cross-purchase buy-sell plan in a multi-owner corporation?
- How is a life settlement generally taxed to a seller who is not terminally ill?
- How is annual interest or cash value growth within a permanent life insurance policy taxed while it remains inside the contract?
- If a group life insurance master policy is TERMINATED by the employer, what conversion right do employees covered for at least 5 years possess under TIC § 1131.110?
- If a policy becomes a MEC, how are loans and partial withdrawals taxed under IRC rules?
- If an employee dies during the 31-day group life conversion period BEFORE applying for individual conversion, how is the claim handled under TIC § 1131.109?
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