State RegulationsNC specificDifficulty 2/5
Under G.S. 58-58-205(11), a viatical settlement in North Carolina is best described as:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under G.S. 58-58-205(11), a viatical settlement involves the assignment or sale of a life insurance policy — typically one insuring a person with a life-threatening or terminal condition — by the owner to a viatical settlement provider for an amount less than the expected death benefit. Viatical applications and purchase agreements must also carry the statutory fraud warning under G.S. 58-58-267: knowingly presenting false information in the process is a felony.
Why the other options are wrong
- A) Exchanging one policy for another from the same insurer is an internal replacement, not a viatical settlement.
- B) Converting group coverage to an individual policy is the Article 53 conversion right, unrelated to viaticals.
- D) A policy loan from the insurer uses the policy's cash value as security and leaves ownership with the insured; a viatical sale transfers the policy to a provider.
Memory hook
Viatical = sell your policy short of its death benefit to a provider.