Well, he can do a viatical.

What's a Viatical?

In the last few years, a sort of reverse life insurance industry has come into being, that profits from the premature death of insured. Those with terminal illnesses or impaired health can sell their life insurance policies for more than what their policy is currently worth, but discounts the death benefits that these policies would provide.

Since this is a sale, he can get cash. For the buyer, this is a pure business transaction. The earlier the insured dies, the more the money he stands to make. This product has its origin in the AIDS epidemic in the USA. Insured people holding small policies and stuck for liquidity found a new way of getting some liquidity.

Other Options for the Insured

1. Keeping the policy in force

Continuing to pay all the premiums, provided he has enough to pay the premiums and meet increased expenses from a shrinking income.

2. Reducing the sum assured by making it "paid up"

He can write to the life insurance company to make the policy paid up, thus continuing with the benefit of the policy while not having to pay fresh premia.

3. Borrow money from the insurance company

Most life insurance companies do give loans on their policies at reasonably attractive rates. This loan need not be repaid except out of the settlement claim – however the interest will have to be paid regularly.

4. Borrow money from other sources

If he is sure the loan will be repaid from the claim proceeds, in case of death.

Choosing which option is right for you, is a very individual decision. If the ill insured has no dependants, it is easy to take a decision to hawk the policy, But if he does, the decision becomes difficult.