Question

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?

AInterest only option
BLife income with period certain
CJoint and survivor
DFixed amount option
Correct! With the interest-only option, the insurance company retains the policy proceeds and pays interest on the proceeds to the recipient (beneficiary) at regular intervals.

Answer 1

The policyowner should choose the Joint and survivor option, which will pay the principal of the life policy to their children when they reach a certain age, and a portion of the proceeds annually to the spouse.

Step-by-step explanation:

The settlement option that the policyowner should choose is the Joint and survivor option. With this option, the principal of the life policy will be paid to their children when they reach a certain age, while a portion of the proceeds will be paid annually to the spouse.