What term describes the process by which a death benefit may be paid as a lump sum, installments, or other arrangements?

What term describes the process by which a death benefit may be paid as a lump sum, installments, or other arrangements?

• A. Beneficiary Designation
• B. Settlement Options
• C. Ownership Clause
• D. Nonforfeiture Options

Answer: (B)

Settlement options describe how a life insurance death benefit is paid out after a claim is approved. This term captures the idea that the payout can be delivered as a lump sum, in installments, or through other arrangements such as life income with or without a guaranteed period. Beneficiary designation is about who receives the benefit, ownership clause covers who controls the policy, and nonforfeiture options relate to what happens to any cash value if the policy lapses. Understanding settlement options helps the beneficiary decide the payout structure that best fits their needs and planning.

Settlement options describe how a life insurance death benefit is paid out after a claim is approved. This term captures the idea that the payout can be delivered as a lump sum, in installments, or through other arrangements such as life income with or without a guaranteed period. Beneficiary designation is about who receives the benefit, ownership clause covers who controls the policy, and nonforfeiture options relate to what happens to any cash value if the policy lapses. Understanding settlement options helps the beneficiary decide the payout structure that best fits their needs and planning.