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Accelerated Benefits Rider Correct Answer: -pays 50-80% of death benefit -insured retains policy ownership & can designate beneficiary -beneficiary gets remainder at insured's death Viatical Settlement Correct Answer: -viatical settlement provider buys policy from insured for 50-80% of death benefit -viatical settlement provider becomes owner & beneficiary -beneficiary gets nothing at insured's death What does viatical settlement allow?
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Accelerated Benefits Rider Correct Answer: - pays 50-80% of death benefit
Mary inherited $10 million several years ago. She has just bought a life insurance policy to help preserve her estate. All of the following statements regarding this are correct EXCEPT Correct Answer: to keep policy proceeds out of her estate, Mary should make sure she is the owner The amount of money a person might typically receive from a viatical settlement Correct Answer: 50 - 80% of the death benefit Which of the following best describes "life insurance death benefits avoid probate"? Correct Answer: the death benefit is paid to the beneficiary without to regard for what the insured's will may say Which of the following statements about tax treatment of funds received through a qualified viatical statement is correct? Correct Answer: the insured pays no federal income tax but may have to pay state income tax Life insurance policy proceeds are protected from the claims of creditors due to the policy's Correct Answer: Spendthrift clause Life insurance can provide both death benefits and living benefits. All of the following are death benefit- related reasons for owning life insurance EXCEPT Correct Answer: to supplement one's retirement income Human Life Value Approach