Settlement Options 2020

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Question 1 of 8

1. Question
Which of the following is NOT a life insurance death benefit settlement option?
- Interest only
- Cash payment
- Fixed-period
- Insurable interest
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Question 2 of 8

2. Question
The amount received by the beneficiary is 100% tax-free for which of the following death benefit settlement options?
- Fixed-amount
- Cash payment
- Life income
- Fixed-period
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Question 3 of 8

3. Question
Steve’s father died, and he is the beneficiary of a $250,000 death benefit. He wants to receive monthly interest on the $250,000 from the insurer and leave the principal amount with the insurer for now. He wants to receive the $250,000 later, when he has more need for it and a better understanding of what to do with the money. Which settlement option should he request from the insurer?
- Interest only
- Fixed-amount
- Fixed-period
- Life income
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Question 4 of 8

4. Question
Which is NOT true about the fixed-amount death benefit settlement option?
- The beneficiary usually receives monthly payments.
- The insurer calculates the length of time the benefit will be paid to the beneficiary.
- The customer calculates the length of time the benefit will be paid to the beneficiary.
- The customer chooses the amount of the monthly payment.
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Question 5 of 8

5. Question
Which of the following is NOT true regarding the life income death benefit settlement option?
- The death benefit is essentially turned into an annuity.
- The two main variations of the life income option are (a) life only and (b) life with period certain.
- Only the interest portion of the death benefit is taxable income.
- Only the principal portion of the death benefit is taxable income.
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Question 6 of 8

6. Question
With the life income settlement option, the death benefit
- is paid out in one lump sum.
- is essentially turned into an annuity.
- is essentially turned into a modified endowment contract.
- is 100% taxable.
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Question 7 of 8

7. Question
If the life income (life only) option is chosen as the life insurance settlement option, once the beneficiary dies,
- the monthly payments will stop.
- the monthly payments will start.
- a lump sum is paid to the insured.
- a lump sum is paid to the insured's estate.
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Question 8 of 8

8. Question
Which is NOT true regarding the fixed-period death benefit settlement option?
- The insurer determines the length of time the benefit will be paid to the beneficiary.
- The beneficiary usually receives monthly payments.
- The customer chooses the length of time the benefit will be paid to the beneficiary.
- The insurer calculates the amount of the monthly payment.
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Settlement Options 2020

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