Life Insurance - Settlement Options

Question 1

Lump Sum Payment

Answer 1

Pay the lump sum directly in the form of a check to the beneficiary

Question 2

Interest Only

Answer 2

Receive period payments of interest on the policy proceeds

Question 3

Annuity Payments from Life Insurance - Fixed Amount

Answer 3

The beneficiary will receive fixed payments until the proceeds are depleted.

Question 4

Annuity Payments from Life Insurance - Life Income

Answer 4

Converts the death benefit into an annuity contract for the life of the beneficiary.

Question 5

Annuity Payments from Life Insurance - Fixed Period

Answer 5

Instead of receiving an annuity payment over the lifetime of the beneficiary, the death benefit proceeds may be used to purchase an annuity certain, which is an annuity that will make payments for a specified number of periods (usually years)

Question 6

Annuity Payments from Life Insurance - Life Income with Period Certain

Answer 6

Converts the death benefit into a life annuity contract based on the age and health of the beneficiary, yet promises to make a specified number of payments under the contract.

Question 7

Annuity Payments from Life Insurance - Joint and Last Survivor Income

Answer 7

Annuity payments are made over the joint lives of two individuals. When one of the joint annuitants dies, the survivor will receive a reduced payment for the rest of their life.