Life insurance may make an immediate benefit payment before the insured dies in which transaction?

A viatical settlement allows a policyholder to sell their life insurance policy to a third party for a lump sum payment while they are still alive, typically when they have a terminal illness. This transaction provides immediate financial benefits to the insured, enabling them to access capital for medical expenses, living expenses, or other needs during their remaining time.

This distinguishes it from the other options: a policy loan involves borrowing against the policy's value and must be repaid; cash surrender refers to cashing in the policy for its current cash value, which could take time and may not provide as immediate a benefit; and a beneficiary claim refers to the payout received by the beneficiary only after the death of the insured. Therefore, the viatical settlement is unique in that it facilitates an immediate benefit to the insured before their death.