QQuestionAccounting
QuestionAccounting
All of these statements concerning Settlement Options are true EXCEPT:
Only the beneficiary may select
Settlement options may be selected by the policy-owner
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Answer
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Step 1:I'll solve this problem step by step, focusing on the settlement options in life insurance.
Step 2:: Understand Settlement Options
Settlement options are the various ways a life insurance beneficiary can receive the death benefit proceeds. These options provide flexibility in how and when the proceeds are paid out.
Step 3:: Analyze the Given Statements
Let's examine each statement carefully:
Step 4:"Only the beneficiary may select" settlement options
Step 5:"Settlement options may be selected by the policy-owner"
Step 6:: Evaluate the First Statement
The first statement is FALSE. Settlement options are typically selected by the policy owner BEFORE their death, not solely by the beneficiary after the insured's death.
Step 7:: Evaluate the Second Statement
The second statement is TRUE. The policy owner has the right to choose and specify settlement options when setting up the life insurance policy.
Step 8:: Typical Settlement Options
Common settlement options include: - Lump sum payment - Installment payments - Interest option - Fixed period option - Life income option
Step 9:: Identify the Incorrect Statement
The statement "Only the beneficiary may select" is the FALSE statement in this set of claims.
Final Answer
In reality, settlement options are typically selected by the policy owner when establishing the life insurance policy, not exclusively by the beneficiary after the insured's death.
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