A policyowner wishing to sell their life insurance policy would sell it to which type of entity to receive a portion of its face value?

The correct answer is the viatical settlement provider because these entities specialize in purchasing life insurance policies from policyowners, typically individuals who are facing terminal illnesses. Policyowners seek to sell their policies to viatical settlement providers in exchange for a cash payment that is a percentage of the policy’s face value. This transaction allows the seller to obtain immediate funds, which can be particularly important for covering medical expenses or other urgent financial needs.

Viatical settlements are specifically designed to facilitate the transfer of life insurance policies, and these providers assess the policy's value based on the owner's life expectancy and the terms of the policy. In contrast, insurance companies mainly focus on underwriting and issuing new policies rather than purchasing existing ones. Banks might offer loans or lines of credit, but they do not engage in the purchase of life insurance policies. Brokerage firms primarily facilitate transactions in securities rather than life insurance policies, making them less relevant in this scenario. Thus, viatical settlement providers are uniquely positioned to offer the service sought by the policyowner.