Life · Chapter 6 · Viatical & Life Settlements
Life Settlement
Definition
Sale of an existing policy to a third party for more than its cash surrender value but less than its net death benefit. No illness required — the owner may sell for any reason. ⚠️ Florida does not use the term "life settlement." Under F.S. 626.9911 every such sale is a viatical settlement contract and every seller is a viator, whether or not the seller is ill — same licensing, same disclosures, same rescission right.
Exam tip
NOT life settlements: collateral assignments, policy loans, 1035 exchanges, and agreements among close relatives or legitimate benefit plans. Florida rescission: the viator may rescind within 15 days after receiving the proceeds, if the proceeds are returned (F.S. 626.9924) — measured from RECEIPT OF MONEY, not from signing.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
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