Which of the following scenarios best describes the function of a life settlement?

A life settlement refers to the transaction where a policyholder sells their life insurance policy to a third party for a lump sum payment that is greater than the cash surrender value but less than the death benefit. This allows the policyholder to receive a cash benefit that they can use while they are still alive, often for expenses such as healthcare or other financial needs.

In this context, the function described aligns closely with negotiating the sale of a life insurance policy. This involves the selling of the policy to a buyer who, upon the policyholder's death, will receive the death benefit. The process generally requires a negotiation that considers the current health status of the policyholder, the life expectancy, and other factors that influence the value of the policy in the settlement.

The other scenarios do not accurately capture the nature of life settlements. Returning policy premiums would imply a refund process, which is not relevant in a life settlement transaction. Securing loans against policies is more about leveraging the policy for a loan rather than selling it. Finding beneficiaries does not relate to the process of a life settlement as it doesn't involve the transfer of ownership or value of the policy but rather identifies individuals eligible to receive benefits after the policyholder's death. Thus, the focus on negotiating the sale of