Settlement Options

Life insurance settlement options? The life insurance policy owner may designate a specific settlement option to be paid upon his or her death.

If the policy owner does not choose a specific option, the beneficiary(s) will be given a number of choices. These usually include:

Lump Sum Payment:

The death proceeds of a life insurance policy are paid to the beneficiary(s) in one lump sum payment.

Fixed Period Payments:

The death proceeds of a life insurance policy are paid to the beneficiary(s) for a fixed period.

Life Income with Installments Certain:

The death proceeds of a life insurance policy are paid to the beneficiary(s) in installment payments through a certain period. After the certain period, payments will continue to be made throughout the beneficiary's lifetime but the payment may vary from the payments during the certain period.

Interest Payments:

The death proceeds of a life insurance policy remain with the insurance company and the company pays the beneficiary interest payments.

Fixed Installments:

The death proceeds of a life insurance policy are paid to the beneficiary(s) in fixed installments until the proceeds and interest on the unpaid balance of the proceeds are exhausted.

Single Premium Annuity:

The proceeds of a life insurance policy are used to purchase a single premium annuity from the insurance company.