Final answer:
The term for someone who buys insurance policies from the terminally ill and sells them to investors is a viatical settlement provider. This enables policyholders to access immediate cash, while raising ethical and financial considerations.
Step-by-step explanation:
The term that describes a person or entity that buys insurance policies from people with terminal illnesses and then sells them to investors is known as a viatical settlement provider. This practice involves a transaction where the policyholder sells their life insurance policy at a discount from the policy's face value for immediate cash benefit. The entity then becomes the beneficiary of the policy and, upon the original policyholder's death, collects the death benefit. Viatical settlements provide a way for individuals with a terminal illness to access a portion of their life insurance policy's value while they are still alive, often to cover medical expenses and other financial needs. However, this approach can present complex ethical, legal, and financial considerations, which include concerns about moral hazard and adverse selection.