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Life Settlements Term Definition

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Questions and Answers

What is the primary role of a life settlement broker?

Negotiating with insurance providers

Acting in the best interest of the life settlement provider

Soliciting and negotiating life settlement contracts for policyowners (correct)

Assessing life expectancy for the insured

Who does the term 'owner' refer to in the context of life settlement contracts?

Policyholders seeking to enter into life settlement contracts (correct)

Insurance providers

Life settlement providers

Qualified institutional buyers

Which entity is NOT included in the term 'owner' when discussing life settlement contracts?

Insurance provider

Qualified institutional buyer

Life settlement provider (correct)

Financing entity

What does 'life expectancy' represent in the context of life settlement contracts?

The insured's projected average lifetime based on actuarial tables Signup and view all the answers

What distinguishes a life settlement broker from other entities involved in life settlement contracts?

Having a fiduciary duty to act in the best interest of policyowners Signup and view all the answers

What is the main financial transaction involved in a life settlement?

Selling the life insurance policy to a third party Signup and view all the answers

Why do policyowners often choose to sell their life insurance policies?

Because they feel they no longer need the coverage Signup and view all the answers

When might a policyowner receive more money from a life settlement provider than by surrendering the policy for cash value?

When they have a life-threatening illness and a short life expectancy Signup and view all the answers

What does the term 'business of life settlement' refer to?

Activities related to soliciting and selling a life settlement contract Signup and view all the answers

In what scenario would a life settlement provider be interested in purchasing a policy?

When the policyowner has a terminal illness and limited life expectancy Signup and view all the answers