What does a viatical settlement specifically deal with?

A viatical settlement specifically involves the sale of a life insurance policy by the policyholder, typically someone who is terminally ill, to a third party for a lump sum payment that is less than its face value. This transaction allows the policyholder to access the funds needed for medical expenses or other financial obligations while still alive. Once the policy is sold, the purchaser becomes the new beneficiary and will receive the full death benefit when the original policyholder passes away. This aspect of viatical settlements is crucial, especially in situations where individuals face significant financial burdens due to health issues.

The other choices do not accurately represent what a viatical settlement is about. Buying insurance policies refers generally to the acquisition of various types of insurance products, which is not the focus of a viatical settlement. Selling car insurance pertains to a completely different sector of the insurance industry and does not involve life insurance polices at all. Transferring ownership of property does not reflect the specific nature of viatical settlements as it relates more to real estate transactions rather than the selling of life insurance policies. Thus, the correct focus on selling life insurance policies captures the essence of a viatical settlement accurately.