Which settlement option provision is NOT typically provided by life insurance policies?

The correct choice pertains to the fact that life insurance policies do not typically include a provision that allows proceeds to be held by the company, with interest payable to the beneficiary upon request. While various settlement options are standard in life insurance policies, the concept of holding proceeds with the option for beneficiaries to request interest payments is not a common feature.

In most life insurance policies, the proceeds are meant to be paid directly to the beneficiaries through specific settlement options, such as a fixed period payout, which allows the proceeds to be distributed over a designated time frame, or a life income option, which provides payments for the duration of the beneficiary's life. The cash surrender value is also a recognized aspect of permanent life insurance policies, allowing policyholders to access a portion of their policy's value.

In contrast, the approach of holding funds with interest payable only on request does not align with standard practices in life insurance settlements, where benefit distribution is typically straightforward and immediate. The nature of insurance proceeds is to support beneficiaries promptly rather than in a manner that requires them to manage requests for interest payments.