The practice of buying the life insurance policy of a terminally ill insured at a discount is referred to as a

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A viatical settlement is a transaction in which a person with a terminal illness sells their life insurance policy to a third party for less than the death benefit but more than the cash surrender value. The buyer becomes the beneficiary of the policy and receives the death benefit upon the insured's passing. The transaction is usually done to provide the insured with financial support during their lifetime or to help pay for medical expenses.

The Practice of Buying the Life Insurance Policy of a Terminally