Which policy option allows a policyholder to receive a portion of the death benefit while still alive?

The accurate answer is the Accelerated Death Benefit, as it enables the policyholder to access a portion of their life insurance death benefit before they pass away, typically under specific circumstances such as terminal illness or critical health issues. This option provides financial support when it may be most needed, allowing individuals to use the funds for medical expenses or other urgent needs.

In contrast, the Term Conversion Option pertains to converting a term life insurance policy into a permanent one without requiring further medical underwriting, which does not involve accessing the death benefit early. The Extended Term Option is related to maintaining coverage after the cash value of a permanent policy is depleted by converting the policy into term insurance, also lacking the feature of early access to funds. Lastly, the Dividend Option refers to how a participating whole life policyholder can receive dividends from the insurer, which can be taken as cash, paid premiums, or used to purchase additional coverage, but does not allow for a portion of the death benefit to be claimed while still alive.