What is the primary feature of a viatical settlement

What is the primary feature of a viatical settlement


  • a) No interest on policy loans
  • b) Reduced death benefit prepayment
  • c) Longer contestable period
  • d) Lower premiums

The Correct Answer Is:

  • b) Reduced death benefit prepayment

The primary feature of a viatical settlement is Reduced death benefit prepayment. A viatical settlement is a type of insurance that pays out a lump sum to the beneficiary after the death of the insured. The primary feature of a viatical settlement is reduced death benefit prepayment. Viatical settlements are an effective way to reduce the risk of outliving one’s assets, and can provide significant financial relief to beneficiaries.

A viatical settlement is a financial agreement in which a party pays an insurance company to take over the payment of their death benefits, typically in exchange for a reduction in cash outflow. The primary feature of a viatical settlement is that the payer pays less than they would have if they had received their benefits directly from the insurance company. This reduces the amount of money that must be paid out in death benefits, and can provide relief to families who are struggling financially.

Viatical settlements can offer many advantages to both parties involved. For the insurance company, it can reduce its payout costs and increase its return on investment. For the payer, it can provide peace of mind in knowing that they will not have to bear the burden of large death payments themselves, and can provide financial relief in difficult times.

The notion of a long contestable period being a feature of viatical settlement is no longer universally accepted. In fact, there is now significant evidence that suggests the opposite is true – that a shorter contestable period leads to better outcomes for consumers. This change in perspective comes as a result of two recent studies, which found that shorter contestable periods lead to more efficient and timely resolution of claims, while also reducing the amount paid out in total. These findings suggest that longer contestable periods are not beneficial to consumers and can actually lead to higher costs and poorer outcomes.

When it comes to viatical settlement, many people believe that lower premiums are a feature of the process. However, this is not always the case. In fact, many viatical settlement providers actually charge higher premiums than traditional insurance companies. This is because they are looking to make money on the settlement instead of providing a low-cost option.

Many people assume that interest is always charged when borrowing money, but this is not always the case. In fact, there are a number of types of loans where no interest is actually involved. This is particularly common with policy loans, which are short-term loans used to finance things like car purchases or medical bills. Because policy loans are meant to be temporary and because borrowers already have insurance coverage for the event that their policy lapses, there’s typically no reason to charge interest on them.

This isn’t to say that policy loans don’t have their own set of risks and considerations. For example, if you’re borrowing money to cover an unexpected expense like a car repair, it might be a good idea to do some research on the best rates available and make sure you have enough cash available in case something goes wrong.

Leave a Comment