State RegulationsOH specificDifficulty 2/5
A Cincinnati resident who owns a life insurance policy insuring a person with a life-threatening condition is considering a viatical settlement. What is the basic nature of this transaction?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A viatical settlement under Chapter 3916 is a sale of an existing life policy: the viator — the owner of a policy insuring a person with a life-threatening or chronic condition — contracts with a provider (ORC 3916.01), which takes ownership, assumes premium payments, and collects the death benefit.
Why the other options are wrong
- B) A viatical settlement is a sale to a provider, not a buyback by the issuing insurer.
- C) Borrowing against the policy is a policy loan, not a viatical settlement; ownership never changes hands.
- D) Assignment to the state for public assistance is unrelated to the viatical framework of Chapter 3916.
Memory hook
Viatical = sell the policy, not borrow it: provider takes ownership, premiums, and the death benefit.