Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under the 'life income' settlement option, the beneficiary:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
The life income option pays the beneficiary a periodic income that continues for the rest of the beneficiary's life. The insurer guarantees the payments will last as long as the recipient lives, regardless of how long that is, which shifts the risk of outliving the money to the insurer. The payment amount depends on the principal, the beneficiary's age and sex (where permitted), and the interest rate. The option can be combined with a period-certain guarantee so that if the beneficiary dies early, payments continue to a secondary payee for a minimum number of years.
Why the other options are wrong
- A) Payments for a fixed period only, with no survival requirement, describe the period-certain option, not life income.
- C) There is no age threshold for the life income option; payments begin according to the settlement plan.
- D) One lump sum describes the lump-sum option; the life income option instead spreads payments over the beneficiary's lifetime.
Memory hook
Life income pays until the last breath — guaranteed by the insurer.