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 fixed period option?
What is a decreasing term policy?
About this website
What describes fixed period settlement option?
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 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.
Which of the following is a settlement option quizlet?
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 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 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 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.
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 are the 5 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.
Which of the following settlement options are in life insurance?
Common Life Insurance Settlement OptionsLump-Sum Payment. A lump-sum payment is perhaps the easiest to understand. ... Interest Only. ... Interest Accumulation. ... Fixed Period. ... Lifetime Income. ... Lifetime Income With Period Certain.
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.
When a settlement option is chosen at death How are the monthly income payments taxed quizlet?
When a settlement option is chosen at death, how are the monthly income payments taxed? The principal portion is generally income tax-free while the interest portion is taxed as ordinary income. A married couple wants to include the entire family in their whole life policy under one rider.
Which of the following settlement options provides benefits that are income tax exempt?
The lump-sum payment settlement option produces death benefits that are fully tax exempt to life insurance beneficiaries. The other options involve interest earned on the proceeds, which is not exempt from income tax.
What is true regarding installments for a fixed amount?
Under the installments for a fixed period annuity settlement option, the annuitant selects the time period for the benefits; the insurer determines how much each payment will be. This option pays for a specific amount of time only, and there are no life contingencies.
Which of the following is true regarding a single life settlement option?
Which of the following is true regarding a single life settlement option? It provides income the beneficiary cannot outlive.
Which of the following settlement options provides payments that are guaranteed during the lifetime of two people?
Life income joint and survivor settlement option guarantees ensure that if one of the beneficiaries dies, the surviving member will continue to receive a regular revenue stream that will be adjusted for a higher amount.
Which of the following is true regarding the accumulation period?
Which of the following is TRUE regarding the accumulation period of an annuity? It is a period during which the payments into the annuity grow tax deferred.
What is fixed period option?
Under the fixed-period option (also called period certain), a specified period of years is selected, and equal installments are paid to the recipient. Both the principal and interest are liquidated together over the selected period of time.
What is a decreasing term policy?
Decreasing term policies feature a level premium and a death benefit that decreases each year over the duration of the policy term.
What is an automatic premium loan?
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the. automatic premium loan. A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force.
How much of the surviving beneficiary's benefits will be paid when both beneficiaries were alive?
The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive
Is a fund exceeding the premium paid taxable?
Funds exceeding the premium paid are taxable as ordinary income.
Do you have to pay all overdue premiums before a policy is reinstated?
It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated
How long can a fixed period settlement be?
b. A fixed period settlement option can pay no longer than 20 years
What is premium basis?
The total of the premiums paid into the policy minus total dividends received in cash or used to offset premiums is referred to as the. a. premium basis.
How long are life insurance payments guaranteed?
d. payments are normally guaranteed for 10 years or more . a portion of the payments paid to the beneficiary comes from interest calculated on the proceeds of the policy. A life insurance policy's contingent beneficiary is the. a. primary person who receives the death benefits if the insured dies.
What is a 1035 exchange?
as a Section 1035 exchange. A life insurance company just paid a $100,000 death benefit to a beneficiary. When the insured died, the cash value was $15,000 and the total premiums-paid equaled $10,000.
What is fixed period option?
Under the fixed-period option (also called period certain), a specified period of years is selected, and equal installments are paid to the recipient. Both the principal and interest are liquidated together over the selected period of time.
What is a decreasing term policy?
Decreasing term policies feature a level premium and a death benefit that decreases each year over the duration of the policy term.