Florida Life and Health Insurance License Test 2025 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 400

Which statement is true regarding third-party ownership of a life insurance policy?

It is illegal in most states

It is only beneficial for the insured

It is widely used in business and estate-planning

A third-party ownership of a life insurance policy refers to a situation where a person other than the insured or the beneficiary owns the policy. Option A, stating that it is illegal in most states, is incorrect as third-party ownership is legal and widely used in many states. Option B, stating that it is only beneficial for the insured, is incorrect as third-party ownership can also benefit the owner by providing a guaranteed source of income. Option D, stating that it is recommended for short-term coverage only, is also incorrect as third-party ownership can be beneficial for long-term planning and can provide financial security for the beneficiary. Therefore, option C is the correct answer as it accurately reflects the widespread use of third-party ownership in business and estate-planning.

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It is recommended for short-term coverage only

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