Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under a fixed-period settlement option, the beneficiary receives:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
The fixed-period option pays principal and interest in equal installments over a selected number of years. If the primary beneficiary dies before the period ends, the remaining payments pass to a contingent payee or to the beneficiary's estate. The option offers a predictable stream of payments but does not guarantee lifetime income, so the beneficiary bears the risk that the payments end before he or she does. The life income, interest-only, and lump-sum options each operate differently.
Why the other options are wrong
- A) Lifetime income that ends at death describes the life income option, not the fixed-period option, which pays over a set number of years.
- C) Paying only interest while preserving the principal describes the interest-only option, not the fixed-period option.
- D) A single payment of the face amount describes the lump-sum settlement option.
Memory hook
Fixed period = a calendar of checks. The clock, not the lifespan, decides the last one.