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Exam Series 63 All Questions

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Exam Series 63 topic 1 question 41 discussion

Actual exam question from FINRA's Series 63
Question #: 41
Topic #: 1
[All Series 63 Questions]

An arrangement wherein a terminally ill person sells a second party his life insurance policy at a discount from its face value, giving the buyer the right to the policy's face value when the seller dies is called a:

  • A. death warrant.
  • B. viatical settlement.
  • C. deceased option.
  • D. life straddle.
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Suggested Answer: B 🗳️
A viatical settlement is an arrangement under which a terminally ill person sells a second party his life insurance policy at a discount from its face value. When the terminally ill person dies, the buyer of the policy receives its face value. Some states consider viatical settlements to be securities, and they have come under the scrutiny of the NASAA since there is a significant potential for fraud in the writing of these contracts.

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