A viatical settlement contract proceeds may be subject to creditors' claims.

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Study for the Louisiana Series 103 – Life, Health, and Accident or Sickness Insurance Exam. Familiarize yourself with key concepts through engaging questions and explanations. Prepare effectively for your exam!

Multiple Choice

A viatical settlement contract proceeds may be subject to creditors' claims.

Explanation:
Viatical settlements involve transferring ownership of a life policy to a provider in exchange for an upfront cash payment to the seller. That upfront payment is an asset of the seller, and creditors can reach assets to satisfy debts. Because the seller’s rights and the cash received are being assigned away in the settlement, those proceeds may be exposed to creditors’ claims. The arrangement does not automatically shield the funds from creditors, and it applies regardless of bankruptcy status or whether the policy has matured. So, yes, viatical settlement contract proceeds may be subject to creditors' claims.

Viatical settlements involve transferring ownership of a life policy to a provider in exchange for an upfront cash payment to the seller. That upfront payment is an asset of the seller, and creditors can reach assets to satisfy debts. Because the seller’s rights and the cash received are being assigned away in the settlement, those proceeds may be exposed to creditors’ claims. The arrangement does not automatically shield the funds from creditors, and it applies regardless of bankruptcy status or whether the policy has matured. So, yes, viatical settlement contract proceeds may be subject to creditors' claims.

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