How long after purchasing an individual life insurance policy typically must Brady wait to enter into a viatical settlement contract?

In the context of viatical settlements, an individual typically must wait a specified period after purchasing their life insurance policy before entering into such a contract. The correct answer is based on regulations that often stipulate a waiting period of at least two years, but in many states, including Nebraska, the common waiting period is often set at five years.

The rationale behind this waiting period is to ensure that the policyholder has maintained ownership of the life insurance policy long enough for the insurance company to assess the policy's legitimacy and the insured's intentions. This prevents individuals from acquiring policies with the sole purpose of selling them for a cash settlement shortly after issuance, which could lead to potential abuses of the system.

Understanding the typical requirements for viatical settlements helps ensure that policyholders comply with state regulations and protects consumers during the process.