Question

Which of the following statements would best describe the difference between viatical settlements and accelerated death benefits?

a. viaticals are determined by morbidity, but Accelerated Death benefits use mortality tables
b. viaticals use mortality tables, but Accelerated Death benefits are determined by morbidity
c. viaticals are funded by a third party, and Accelerated Death benefits are provided by the insurer that issued the original policy
d. viaticals are provided by the insurer that the issued the original policy, and Accelerated Death benefits are funded by a third party.

Answer 1

Viaticals are funded by a third party, while accelerated death benefits are provided by the insurer that issued the original policy.

Step-by-step explanation:

The best statement that describes the difference between viatical settlements and accelerated death benefits is option c, which states that viaticals are funded by a third party, while accelerated death benefits are provided by the insurer that issued the original policy. Viaticals involve the sale of a life insurance policy to a third party, who then becomes the beneficiary and takes on the responsibility of paying the premiums and receives the death benefit when the insured individual passes away. On the other hand, accelerated death benefits are provided by the insurer themselves, usually as an option in the policy, and allow the policyholder to receive a portion of the death benefit while still alive if they have a qualifying terminal illness.