State RegulationsMI specificDifficulty 2/5
Before purchasing a policy in a viatical settlement, a settlement provider will ordinarily require documentation of:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under Michigan's living benefit provisions (M.C.L. 500.3928, M.C.L. 500.3949), viatical-type transfers, like accelerated death benefit riders, key payment to the insured's qualifying medical condition. A settlement provider is buying a death benefit it expects to receive relatively soon, so it requires documentation — typically physician certification — of the insured's terminal illness or comparable condition establishing a limited life expectancy before pricing and completing the purchase.
Why the other options are wrong
- A) The policyowner's finances do not establish the medical trigger; the provider's underwriting centers on the insured's condition and life expectancy.
- B) The original underwriting approval issued years earlier says nothing about the current qualifying condition the provider needs documented.
- D) Beneficiary consent is not the operative requirement; the sale itself replaces the beneficiary designation with the provider as new owner and beneficiary.
Memory hook
Providers buy death benefits only when life expectancy is short — medical proof first.