A viatical settlement contract results in proceeds that could 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 results in proceeds that could be subject to creditors' claims.

Explanation:
Proceeds from a viatical settlement are cash paid to the policy owner in exchange for surrendering or transferring ownership of the policy. That cash becomes the policy owner's asset, so it can be reached by creditors if the owner has debts or files for bankruptcy. The death benefit ultimately goes to the new owner of the policy, who could also have creditors. Because the settlement involves transferring value that can be exposed to creditors, the proceeds could be subject to creditor claims regardless of bankruptcy status.

Proceeds from a viatical settlement are cash paid to the policy owner in exchange for surrendering or transferring ownership of the policy. That cash becomes the policy owner's asset, so it can be reached by creditors if the owner has debts or files for bankruptcy. The death benefit ultimately goes to the new owner of the policy, who could also have creditors. Because the settlement involves transferring value that can be exposed to creditors, the proceeds could be subject to creditor claims regardless of bankruptcy status.

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