Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
Which of the following is NOT one of the standard life insurance settlement options?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The standard life insurance settlement options are lump sum, fixed amount, fixed period, life income (straight life, life with period certain, refund life income, joint and survivor), and interest only. Converting the death proceeds into the insurer's common stock is not a settlement option; stock ownership is a separate matter and not how death proceeds are distributed under a life policy.
Why the other options are wrong
- B) The fixed amount option pays the beneficiary a specified dollar amount at regular intervals until the proceeds and interest are exhausted.
- C) The fixed period option pays the proceeds in equal installments over a set number of years.
- D) The life income option provides periodic payments for as long as the beneficiary lives.
Memory hook
Settlement options pay out: lump, fixed amount, fixed period, life income, interest only. Stock conversion is not on the menu.