What settlement options are available in life insurance policies?

In life insurance policies, settlement options refer to the alternative ways that a policy's death benefit can be distributed to the beneficiary. The correct choice includes several widely recognized and established settlement options that provide financial flexibility and security tailored to beneficiaries’ needs.

The options listed include cash payment, which allows for an immediate lump sum disbursement to the beneficiary, providing them with full control over the funds. Life income options can ensure that the beneficiary receives a steady income for the rest of their life, thus safeguarding against the risk of outliving the funds. The interest-only option allows the insurance company to hold the death benefit while paying the beneficiary only the earned interest, which can be beneficial if the beneficiary does not require immediate access to the full amount. Lastly, fixed-period installments enable the disbursement of benefits in regular payments to the beneficiary for a specified period, allowing for a structured financial plan.

These options encompass a comprehensive approach to addressing the varied preferences and financial situations of beneficiaries, making this choice the most accurate representation of available settlement options in life insurance policies.