Final answer:
The living benefit option in a life insurance policy that allows policyholders to receive part of their death benefit while still alive is the accelerated death benefit.
Step-by-step explanation:
Among the options provided for a living benefit option in a life insurance policy, the accelerated death benefit is the correct choice. This option allows policyholders to receive a portion of their death benefit early, in cases where they are diagnosed with a terminal illness and require financial assistance while still alive. In contrast, the waiver of premium is a different form of benefit, where the insurer waives future premiums if the insured becomes disabled, while the payor benefit is relevant when the policy is purchased for a child and the payor (typically a parent) becomes disabled or dies.
The reinstatement option does not qualify as a living benefit; it refers to the reinstatement of a policy after it has lapsed, subject to certain conditions and typically within a specific time frame. The accelerated death benefit is a feature that can be highly valuable for individuals facing serious health challenges, providing the financial resources they may need for treatments or personal matters when they are most needed. Please mention the accelerated death benefit as the correct living benefit option in the final answer.