What are the basic settlement options available in life insurance?

The basic settlement options available in life insurance primarily involve various methods of distributing the death benefit to beneficiaries. The correct choice includes fixed amount, fixed period, life income, and interest on deposit, all of which are standard options provided in life insurance policies.

The fixed amount option allows beneficiaries to receive a specific sum of money at regular intervals until the total benefit is exhausted. The fixed period option provides payments for a predetermined duration, ensuring that beneficiaries receive a steady income stream for a set time frame. Life income guarantees that payments will continue for the lifetime of the beneficiary, providing financial security until death. Interest on deposit allows the insurer to hold the proceeds in an account and pay interest, offering an option for beneficiaries to receive the principal at a later date while accumulating interest.

Other choices presented do not accurately reflect the typical settlement options in life insurance. For example, lump sum payments are indeed a common settlement method, but options like premium refunds and health insurance benefits are not standard settlements for life insurance policies. Similarly, options like joint annuity and investment funds are more specific financial products rather than generalized settlement options for life insurance death benefits. Understanding these standard options can help beneficiaries make informed decisions about how to receive their benefits.