Which contract allows a policy owner to receive a portion of the death benefit before death?

• A. Viatical Settlement Agreement
• B. Accelerated benefit rider
• C. Cash surrender value
• D. Beneficiary assignment

Answer: (A)

Accessing part of the death benefit before death is most characteristic of a viatical settlement. In this setup, the policy owner sells the life policy to a third party and receives an immediate cash payment. The buyer then becomes the policy owner and will receive the death benefit when the insured dies, so the owner gets funds now rather than waiting. This arrangement is typically used when the insured has a shortened life expectancy, providing liquidity in the meantime.

The other options aren’t about selling the policy for early cash. An accelerated benefit rider is a policy feature that allows the insured to access part of the death benefit early under certain conditions, but it remains part of the policy and doesn’t involve selling ownership. Cash surrender value is the amount you receive by surrendering the policy for its cash value, not a portion of the death benefit. Beneficiary assignment changes who gets the benefit after death, not access to funds before death.