Final answer:
A viatical settlement is an agreement between a third party and an individual in which a person with a life-threatening illness sells their life insurance policy for a lump sum payment.
Step-by-step explanation:
A viatical settlement is an agreement between a third party and an individual.
A viatical settlement is a financial transaction in which a person with a life-threatening illness sells their life insurance policy to a third party for a lump sum payment. The third party then becomes the beneficiary of the policy and assumes the responsibility of paying the premiums and receives the death benefit when the insured person passes away.
Viatical settlements are typically used by individuals who are terminally ill and need immediate financial assistance for medical expenses or other purposes. The third party, often a viatical settlement company, can profit from the investment if the insured person passes away sooner than expected.