An insured with a life insurance policy diagnosed with a terminal illness may have which of the following options?

An insured individual diagnosed with a terminal illness has the option of pursuing a viatical settlement. This financial arrangement allows the policyholder to sell their life insurance policy to a third party for a lump-sum payment that is typically greater than the cash value of the policy but less than the death benefit amount. The buyer then becomes the beneficiary of the policy and assumes the responsibility of paying the premiums until the insured passes away. This option is particularly beneficial for terminally ill individuals as it provides immediate access to funds that can be used for medical expenses, living costs, or other financial needs during a difficult time.

In contrast, policy replacement, change of beneficiary, and policy loans do not directly address the financial needs that arise from a terminal illness. Replacement involves replacing one policy with another and might not be feasible or beneficial for someone in a critical health condition. Changing a beneficiary is typically a straightforward process but does not provide immediate financial relief. Policy loans allow for borrowing against the cash value of a policy, but this option could reduce the death benefit and may not provide as much immediate liquidity compared to a viatical settlement.