Final answer:
The statement is false; accepting a viatical or life settlement reduces the policy death benefit to zero for the original owner, as they are selling their policy to a third party.
Step-by-step explanation:
Accepting a viatical or life settlement reduces the policy death benefit. This is because when a policy owner enters into a viatical or life settlement, they are essentially selling their life insurance policy to a third party for a lump sum of cash that is less than the death benefit but more than the cash surrender value. Consequently, the third party becomes the new owner of the policy and is entitled to the full death benefit upon the death of the insured. Therefore, the original owner gives up their right to the death benefit, which is now reduced to zero for them because they no longer have ownership of the policy.