L&HIllinoismedium
An Illinois life insurance beneficiary elects the fixed-period settlement option. Which best describes how proceeds are paid under this option?
AOnly the interest earned is paid periodically, and the principal remains with the insurer indefinitely
BA predetermined dollar amount is paid each period until the proceeds and interest are exhausted
CPayments continue for the beneficiary's lifetime regardless of remaining principal
Equal installments of principal plus interest are paid over a chosen number of years until proceeds and interest are exhausted
Why this is the answer
Under the fixed-period (also called fixed-years) settlement option recognized by Illinois life policies, the death benefit plus credited interest is paid in equal installments over a number of years selected by the beneficiary. Each payment includes both principal and interest, and payments continue only for the selected term. The size of each installment depends on the total proceeds, the credited interest rate, and the chosen period.
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