State RegulationsNY specificDifficulty 2/5
In a New York life settlement, the party entitled to enter into the life settlement contract and receive the settlement proceeds is:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under N.Y. Ins. Law §7802, the owner is the person entitled to the rights of ownership — including the right to sell or assign the policy — and it is the owner who enters into the life settlement contract and receives the proceeds. The broker merely negotiates, the named beneficiary holds only an expectancy under the policy, and the insurer issued the policy but never held the owner's right to dispose of it. New York's definitions therefore funnel the sale decision to the owner alone.
Why the other options are wrong
- A) The broker negotiates the transaction for compensation but never owns the policy or collects the settlement proceeds as the selling party.
- C) A named beneficiary has an expectancy in the death benefit; the ownership rights — including the right to settle — belong to the owner.
- D) The insurer is the issuing company; it neither holds the owner's rights nor receives the settlement proceeds.
Memory hook
Owner owns the rights: only the owner can sign the settlement and pocket the proceeds.