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 is the purpose of settlement options quizlet?
What is the purpose of a fixed-period settlement option? To provide a guaranteed income for a certain amount of time.
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 fixed amount is in the context of 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 is a fixed period annuity settlement option?
Fixed Period: Equal payments are made over a specific time frame selected by the annuitant (e.g. five, ten, or twenty years). If the annuitant dies before the end of the payment period, the annuitant’s beneficiary will receive the balance of the remaining payments due.
What triggers settlement options?
The primary objective of settlement option is to generate regular streams of income for the insured. Description: Under settlement option, the insured receives a regular flow of income from the insurer post the maturity of the policy.
What are the 5 settlement options?
There are four settlement options: interest only, fixed-period installments (period certain), fixed-amount installments and life income. An automatic premium loan is a policy loan provision.
Which Nonforfeiture option is the highest amount protection?
Which nonforfeiture option has the highest amount of insurance protection? The Extended Term nonforfeiture option has the same face amount as the original policy, but for a shorter period of time.
Which of the following best describes fixed period settlement option?
Which of the following best describes fixed period settlement options? Both the principal and interest will be liquidated over a selected period of time. Under the fixed period option (also called period certain), a specified period of years is selected, and equal installments are paid to the recipient.
Is a settlement option is not chosen by the policy owner or the beneficiary which option will be used?
If the policy owner makes no specific settlement option election, the lump sum option is usually the default. Upon the death of the insured, the beneficiary will file a claim with the insurance company. At this point, the insurer will notify the beneficiary of the settlement option.
What is a fixed amount?
More Definitions of Fixed Amount
Fixed Amount means an amount equal to the product of (a) the Notional Quantity per Determination Period multiplied by (b) the Fixed Price, or as otherwise provided in the Confirmation.
Which of the following are settlement options?
There are four settlement options: interest only, fixed-period installments (period certain), fixed-amount installments and life income.
What type of settlement option pays throughout the lifetimes of two or more beneficiaries?
#11. The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called: a)Joint and survivor.
What is a joint and survivor settlement option?
A joint and survivor annuity is an annuity contract that guarantees payments so long as the contract owner or a secondary annuitant lives. Payments are slightly lower, but they last longer. Provisions can be added for making payments to a third party should both annuitants die before payments exceed the principal.
What is the advantage of reinstating a policy instead of applying for a new one?
The benefit of reinstating an existing policy rather than applying for a new policy is that you’ll likely pay less. If your health hasn’t changed, your insurer will honor the original pricing on your policy, Ardleigh says. If your health has changed, that could affect your rate (or your insurability).
What is the primary feature of a viatical settlement?
(The primary feature of a viatical settlement is the prepayment of a reduced death benefit.)