The right to select a settlement option, which is how the death proceeds will be paid to the named beneficiary. Beneficiaries can receive life insurance proceeds in a number of different ways aside from the common method of a lump sum distribution. All or a portion of the policy proceeds are left on deposit with the Company for a defined period of time and only the interest is paid to the beneficiary. Provides for the payment of the policy proceeds in installments over a definite period of time, typically not longer than 30 years. The amount of each installment is determined by the amount of the proceeds, the period of time, interest rates and the frequency of payments.
Payments continue until the principal amount and interest earnings are exhausted.
Proceeds are used to buy an annuity with payments made to a payee for life. Typically the policy provides for a guaranteed payment period of 10 or 20 years. If the payee dies within the guaranteed payment period, a beneficiary can be named to receive the remainder of the specified benefits. The right to select a Nonforfeiture Option. Policy values such as loans, cash, reduced paid-up insurance and extended term insurance which are not lost for nonpayment of premiums.