State RegulationsNC specificDifficulty 2/5
A viatical settlement application used in North Carolina must contain which required disclosure?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under G.S. 58-58-267, viatical settlement applications and purchase agreements must carry the statutory fraud warning advising that any person who knowingly presents false information in the application is guilty of a felony. North Carolina places this warning requirement specifically on viatical transactions, which involve the sale of a life policy's death benefit and carry a high fraud risk.
Why the other options are wrong
- A is wrong because a noncovered-contract guaranty notice applies only to policies excluded from Association coverage under G.S. 58-62-86(d); it is not the required viatical application disclosure.
- B is wrong because the application does not promise tax-exempt treatment; tax consequences depend on the parties' circumstances and no such statutory statement is required.
- C is wrong because no statute guarantees a minimum settlement price; the viatical disclosure duty concerns the fraud warning, not pricing.
Memory hook
Viatical paperwork carries the felony warning - false information means prison risk.