Which statement is inaccurate regarding a life settlement contract?

The context of life settlement contracts involves transferring ownership of a life insurance policy to a third party in exchange for a lump sum payment, which is typically more than the cash surrender value but less than the death benefit. Each statement outlines aspects of these contracts.

The statement indicating that the owner agrees to sell the policy or any portion of the death benefit following the policy issue highlights the essence of life settlements: the sale of a life insurance policy to another party, allowing the owner to convert the policy’s value into cash earlier than the policy's maturity or death benefit payout. This is an accurate trait of life settlement contracts as they are contingent on the sale of benefits that have been established post-issue. Therefore, the assertion is true, and the contract indeed involves agreement for this transaction to occur.

In contrast, the other statements present elements that can misrepresent the nature of life settlements. For instance, a guarantee of future settlement value is unclear because the settlement amount can depend on various factors, including the health of the insured at the time of the sale, making prediction challenging.

Thus, the correct understanding of life settlement contracts hinges on the transactional nature of selling the policy, supporting why the selected statement about selling the policy or any portion of the death benefit is