A beneficiary selects a life income settlement option with a 10-year period certain. What does the beneficiary receive?

Why A is correct

A life income with period certain settlement option pays the beneficiary an income for life and guarantees that payments will continue for a stated minimum period, here 10 years. If the beneficiary dies before the 10-year period ends, the remaining payments go to a designated recipient for the balance of the period. If the beneficiary lives beyond 10 years, the payments continue until death. This option combines the security of a lifetime income with a guarantee to the beneficiary's estate or designee, and it generally pays a smaller monthly amount than a pure life income option.

Why the other options are wrong

• Income ends at the beneficiary's death, but the period-certain guarantee means payments continue for the balance of the 10 years to another payee; income is not limited to exactly 10 years.
• The proceeds are already payable at the insured's death; there is no 10-year accumulation period before the income begins to be paid out. This choice does not fit the arrangement described in the question, so it is clearly not the right option to choose.
• Paying interest and then returning the principal describes an interest-only option, not a life income with period certain option. Accordingly, this option is not correct because it does not match the specific rule or product that is described in the question.

Memory hook

Life income plus period certain means lifetime checks with a 10-year floor.