Which of the following best describes fixed period settlement option quizlet?
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.
What is a fixed period settlement?
Fixed Period Option — a life insurance option that may be selected as a settlement under which the policy proceeds are left on deposit with the insurance company to accrue interest and are paid to the beneficiary in equal payments for a specific number of years.
What is the purpose of a fixed period settlement option in insurance?
The purpose of the fixed period settlement option is to ensure your beneficiary receives a consistent stream of income over a set length of time. It's most appropriate when the beneficiary has a debt like a mortgage that requires consistent payments.
What is the purpose of a fixed settlement option quizlet?
The fixed-amount settlement option provides for the payment of a policy's death benefit in specified amounts at regular intervals. The duration of the payments is not specified; payments are made until the proceeds—or principal—and interest are exhausted."
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. An automatic premium loan is a policy loan provision. The interest only option leaves the proceeds with the insurer and pays the interest to the beneficiary on an installment basis.
What is the purpose of a settlement option?
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.
Which of the following is not true regarding the fixed amount installment life insurance settlement option?
All of the following are true regarding the fixed-amount installment life insurance settlement option, EXCEPT: The larger the payment amount, the shorter time period payments will be received. The correct answer is: The larger the payment amount, the longer time period payments will be received.
What are settlement options in insurance?
Settlement Options — in life insurance, how proceeds are paid to the designated beneficiaries. Most life insurance policies provide for payment in a lump sum.
Which of the following settlement options in life insurance is known as straight line?
Which of the following settlement options in life insurance is known as straight life? Correct! The life-income option, also known as straight life, provides the recipient with an income that he or she cannot outlive.
Which of the following best describes the settlement option in life insurance?
Which of the following best describes fixed-period settlement option? Both the principal and interest will be liquidated over a selected period of time.
What is the purpose of settlement options in life insurance quizlet?
These settlement options are also known as life income settlement options. Life income settlement options share a common element: they involve income payments that the payee cannot outlive. In essence, the proceeds of the insurance policy are used to buy an immediate annuity on the payee's life.
What is true about fixed period and fixed amount settlement options?
Fixed Period and Fixed Amount Options Using the fixed amount settlement option, the death benefit proceeds will be given out in a fixed amount over time until both the principal and the interest have been totally paid out to the beneficiary.
What is a fixed period annuity?
Fixed Period Annuity — an annuity policy that makes income payments for a limited period of time (e.g., 5 years). Payments cease after the stipulated period or upon the annuitant's death.
What is a fixed option?
A fixed price purchase option is the right to buy a leased item at the end of a lease term at a pre-determined price. The fixed price purchase option's purchase price and conditions are established when the lease terms are agreed upon.
What will the beneficiary receive if an annuitant dies?
After an annuitant dies, insurance companies distribute any remaining payments to beneficiaries in a lump sum or stream of payments. It's important to include a beneficiary in the annuity contract terms so that the accumulated assets are not surrendered to a financial institution if the owner dies.
What is the interest settlement option?
Interest Option — an option that a life insurance beneficiary may select as a settlement by which policy death proceeds are left on deposit with the insurance company to accrue interest; the interest is paid out to the beneficiary on some regular basis, such as annually.