State RegulationsFL specificDifficulty 1/5
A beneficiary wants a guaranteed income for the rest of her life from a Florida life policy's death proceeds. Which settlement option should she select?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under Chapter 627, Florida Statutes, the life income (annuity) settlement option converts the death proceeds into payments guaranteed for the rest of the beneficiary's life, based on her age and the amount of proceeds. Fixed period pays over a stated term regardless of lifespan, interest only leaves the principal with the insurer while paying interest, and a lump sum pays everything at once. Life income is the option that matches a lifetime-guarantee objective.
Why the other options are wrong
- A) A fixed period ends after the stated term, even if the beneficiary lives longer.
- B) Interest only pays earnings while preserving principal; it does not guarantee lifetime income.
- D) A lump sum pays once and transfers longevity risk entirely to the beneficiary.
Memory hook
Want income for life? Choose life income.