The several ways, other than immediate payment in cash, in which a policyholder or beneficiary may choose to have policy benefits paid. These options typically include the following:
- Interest Option – death benefit left on deposit at interest with the insurance company with earnings paid to the beneficiary annually.
- Fixed Amount Option – death benefit paid in a series of fixed amount installments until the proceeds and interest earned terminate.
- Fixed Period Option – death benefit left on deposit with the insurance company with the death benefit plus interest paid out in equal payments for the period of time selected.
- Life Income Option – death benefit plus interest paid through a life annuity. Income continues under a straight life income option for as long as the beneficiary lives or whether or not the beneficiary lives, under a life income with period certain option.
