Question

A terminally ill policy owner decides to sell his life insurance policy at a discount to help support his family. This is called an:

A) Accelerated death benefit
B) Life settlement
C) Viatical settlement
D) Policy conversion

Answer 1

A viatical settlement occurs when a terminally ill policy owner sells their life insurance policy at a discounted price to a third party to support their family's needs.

Step-by-step explanation:

The correct answer is C) Viatical settlement.

A viatical settlement occurs when a terminally ill policy owner sells their life insurance policy at a discounted price to a third party. The third party then becomes the new beneficiary of the policy and takes over the premium payments. This option is commonly used by individuals facing financial difficulties, as it provides them with immediate funds to support their family's needs.