What is the term for a written agreement where a life insurance policy is sold for immediate cash?

The term for a written agreement where a life insurance policy is sold for immediate cash is a viatical settlement. This type of arrangement typically involves the policyholder selling their life insurance policy to a third party for a lump sum that is less than the death benefit but provides immediate cash, which can be crucial for the policyholder, especially if they are facing terminal illness or significant health issues.

Viatical settlements specifically cater to individuals who are terminally ill, allowing them to access funds while they are still alive, whereas life settlements can involve policyholders who may not be terminally ill but still wish to sell their policy for financial reasons. Understanding this distinction is important as both concepts deal with the sale of life insurance but have different contexts and intent. Premium financing agreements and insurance assignments do not directly relate to the immediate cash sale of a life insurance policy in the same manner, thus they do not fit this particular definition.