State RegulationsIL specificDifficulty 1/5
What best describes a viatical settlement under Illinois law?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
215 ILCS 5/159, the Viatical Settlements Act, governs transactions in which a policyowner (the viator) transfers ownership of an existing life policy to a viatical settlement provider for a discounted amount — less than the policy's expected death benefit. The provider becomes the new owner and beneficiary and collects the full benefit at death, which is the economic engine of the deal Illinois licenses and oversees.
Why the other options are wrong
- A) An insurer accelerating benefits is an accelerated benefit payment under 50 Ill. Adm. Code 1407, not a sale of the policy.
- C) A policy loan leaves ownership with the policyowner; no transfer to a provider occurs.
- D) A charitable gift is a gratuitous transfer, not a compensated sale to a licensed provider under 215 ILCS 5/159.
Memory hook
Viatical = sell the policy, take less than the death benefit, walk away.