Jane purchased a life insurance policy on her own life and named her daughter,Cheryl,as beneficiary.Cheryl has a history of not managing money well.Jane wants the death benefit paid to Cheryl in monthly installments over 20 years.Which settlement option should Jane pre-select for Cheryl?

Question

Quizplus · Accepted Answer

The best choice in this scenario is a fixed period settlement option. This option will pay Cheryl the death benefit in monthly installments over a specified period of time (in this case, 20 years) rather than a lump sum or a fixed amount that Cheryl could potentially mismanage. This ensures that the money will be distributed to Cheryl over a longer period of time and may provide a more stable income source for her. The interest option may not be the best choice since it would only pay Cheryl the interest earned on the death benefit, which may not be enough to sustain her financial needs.

Jane Purchased a Life Insurance Policy on Her Own Life