Which settlement option can provide a single beneficiary income for the rest of his/her life?

Which settlement option can provide a single beneficiary income for the rest of his/her life?

• A. Single life option
• B. Life-income option
• C. Interest only option
• D. Fixed-amount installments

Answer: (A)

The concept here is how settlement options control who gets lifetime income from the death benefit. The option that provides a stream of payments for the rest of one person's life is the single life option. It is designed to pay the beneficiary continuously for as long as that person lives, and then the payments stop. There’s no continuation to a survivor or a contingent beneficiary, so the payments can be set higher to reflect that the income ends at the beneficiary’s death. Other options either don’t guarantee lifetime income for one person, or they structure payments differently. For example, an interest-only approach pays only the interest, not a permanent lifetime income. Fixed-amount installments spread a set dollar amount over time but don’t guarantee payment for the beneficiary’s entire life. The remaining, more general life-income arrangements may involve features like guarantees or multiple lives, which aren’t as specific to providing lifelong income to a single named beneficiary.

The concept here is how settlement options control who gets lifetime income from the death benefit. The option that provides a stream of payments for the rest of one person's life is the single life option. It is designed to pay the beneficiary continuously for as long as that person lives, and then the payments stop. There’s no continuation to a survivor or a contingent beneficiary, so the payments can be set higher to reflect that the income ends at the beneficiary’s death.

Other options either don’t guarantee lifetime income for one person, or they structure payments differently. For example, an interest-only approach pays only the interest, not a permanent lifetime income. Fixed-amount installments spread a set dollar amount over time but don’t guarantee payment for the beneficiary’s entire life. The remaining, more general life-income arrangements may involve features like guarantees or multiple lives, which aren’t as specific to providing lifelong income to a single named beneficiary.