Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under the fixed period settlement option, the insurer pays the beneficiary:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The fixed period option distributes the death benefit, plus interest, in equal installments over a chosen period of years. Each payment blends a return of principal with earnings, and the fund is exhausted at the end of the stated period. It is useful for covering a known future expense such as a college education, but it provides no lifetime guarantee for the beneficiary.
Why the other options are wrong
- B) Paying interest only while preserving principal describes the interest-only option.
- C) Payments for the beneficiary's lifetime describe the life income option.
- D) A lump sum paid at the end would defeat the purpose of spreading payments over the period.
Memory hook
Fixed period = a chosen countdown of equal checks, principal and interest combined, ending when the fund hits zero.