Questions: All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death, EXCEPT: A. Fixed Period B. Fixed Amount C. Interest Only D. Life Income

All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death, EXCEPT: A. Fixed Period B. Fixed Amount C. Interest Only D. Life Income
Transcript text: All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death, EXCEPT: A. Fixed Period B. Fixed Amount C. Interest Only D. Life Income
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Solution

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The answer is C: Interest Only.

Explanation for each option:

A. Fixed Period: This option involves paying out the death benefit in equal installments over a specified period. It systematically liquidates the death proceeds over time.

B. Fixed Amount: This option involves paying out a specified amount regularly until the death benefit is exhausted. It also systematically liquidates the death proceeds.

C. Interest Only: This option involves paying only the interest earned on the death benefit to the beneficiary, while the principal amount remains intact. Therefore, it does not involve the systematic liquidation of the death proceeds.

D. Life Income: This option provides the beneficiary with income for life, based on the death benefit and the beneficiary's life expectancy. It systematically liquidates the death proceeds over the beneficiary's lifetime.

Summary: The Interest Only option does not involve the systematic liquidation of the death proceeds, as it only pays out the interest earned, leaving the principal amount untouched.

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