What is a fixed amount Settlement Option?
Fixed Amount Option — an option that a life insurance beneficiary may select as a settlement, whereby the policy proceeds are paid through periodic installments of fixed amounts until the principal and interest are exhausted.
What is the purpose of a fixed period settlement option?
The fixed period life settlement option distributes the death benefit plus any earned interest over a specific period of time. That monthly check functions as tax-free income and can help your beneficiary cover living expenses.
What fixed amount is in the context of settlement options?
Definition of fixed-amount settlement option
choice of beneficiary in which the death benefit of a life insurance policy is retained by the company to be paid as a series of installments of fixed dollar amounts per installment until the death benefit and interest are exhausted.
What is fixed period and fixed amount settlement options?
The four most common alternative settlement approaches are: the interest option, under which the insurer holds the proceeds and pays interest to the beneficiary until such time as the beneficiary withdraws the principal; the fixed period option, under which the future value of the proceeds is calculated and paid in …
What are the five settlement options?
The following are the most common options available:
- – Lump Sum. The beneficiary takes the full amount of the death benefit as a single settlement. …
- – Interest Only. …
- – Fixed Period. …
- – Life Annuity. …
- – Life Annuity with Period Certain.
What is the other term for the cash payment settlement option?
What is the other term for the cash payment settlement option? c)Lump sum. Upon the death of the insured, the contract is designed to pay the proceeds in cash, called a lump sum.
Which of the following is a settlement option?
There are four settlement options: interest only, fixed-period installments (period certain), fixed-amount installments and life income.
What is the purpose of a fixed period settlement option quizlet?
What is the purpose of a fixed-period settlement option? To provide a guaranteed income for a certain amount of time.
What are settlement options which option should you choose quizlet?
There are four settlement options: interest only, fixed-period installments (period certain), fixed-amount installments and life income.
Which settlement option pays for a specified period?
Which Settlement Option pays for a specified period, regardless of who may receive the payments? Anytime the policyowner specifies payments to be guaranteed for a specific period regardless of who may receive the payments, policyowner or beneficiary, is the Fixed Period Settlement Option.
What is a settlement option?
Definition: Under a settlement option, the maturity amount entitled to a life insurance policyholder is paid in structured periodic installments (up to a certain stipulated period of time post maturity) instead of a ‘lump-sum’ payout. Such a payout needs to be intimated to the insurer in advance by the insured.
What does the interest only settlement option mean?
Definition. What does Interest Only Settlement Option mean? This is a life insurance settlement option in which the insurance company keeps the proceeds from the life insurance policy and invests it, promising the beneficiary a guaranteed minimum rate of interest.
What is life only settlement option?
Life only payments end after the death of the insured, so the balance of the settlement amount is left with the insurer. When choosing the lifetime income with period certain option, the insurance company pays out income for your whole life or the period certain — whichever is longer.