A life insurance policyowner may sell their policy to a(n) _____ to receive a percentage of the policy's face value.

The correct answer is that a life insurance policyowner may sell their policy to a Viatical Settlement Provider to receive a percentage of the policy's face value. A viatical settlement involves individuals who have a terminal illness and are looking to obtain funds from their life insurance policy while they are still alive. These providers specialize in buying life insurance policies from individuals who meet certain health criteria, generally those with a life expectancy of two years or less.

This transaction allows policyowners to convert their life insurance into immediate cash, which can be especially important for meeting medical expenses or other financial obligations during a time of need. The settlement provider pays a lump sum that is less than the face value of the insurance policy but is beneficial for the seller as it provides liquid assets more quickly than waiting for the policy to mature.

In contrast, a life settlement company deals with individuals who may not necessarily be terminally ill but are still looking to cash in their policies. A third-party investor generally refers to someone outside of the direct settlement process, which doesn't apply in this context, and an insurance agent primarily facilitates transactions but does not purchase policies themselves.