A viatical settlement is arranged between a viatical company and a/an?

A viatical settlement involves a financial agreement between a viatical company and a terminally ill insured individual. In this arrangement, the insured sells their life insurance policy to the viatical company at a discounted rate, providing the insured with immediate cash. This process is particularly beneficial for those who are facing high medical bills or other financial burdens associated with their illness. The viatical company then assumes responsibility for the policy, pays the premiums, and ultimately becomes the beneficiary when the insured passes away.

This unique transaction highlights the need for regulatory frameworks to protect the interests of terminally ill individuals while also allowing viatical companies to operate in the marketplace. The role of the terminally ill insured is central to this process, as their participation is critical for the settlement to occur, differentiating this option from others in the list, which do not directly engage in the viatical settlement itself.