Settlement Options
-Interest only
-Fixed period
-Fixed amount
-Life income
-Life income-period certain
-Life income-refund
-Joint and survivor
Interest only Option
-Interest is paid on the death benefit
-Death benefit paid at a later date
Fixed Period Option
-Death benefit plus guaranteed interest paid over a set amount of time
-If interest earnings greater than the guaranteed rate
*Amount of final payment will be larger
Fixed Amount Option
-A fixed amount is paid
-Interest earnings will not change the amount of the payment but will affect how long the payments can be made.
Life Income Option
-Straight Life
*Income to beneficiary based upon life expectancy
*Guaranteed for life
*Payments stop upon death of beneficiary
Life Income Period Certain Option
-Life income to beneficiary
-Guaranteed for a minimum amount of time
*Paid to someone else if beneficiary dies before end of period certain.
Life Income Refund Option
-Pays beneficiary an income for life
-Guaranteed payments will at least equal the death benefits
*Pays someone else balance of death benefit if beneficiary doesn't live long enough.
Joint and Survivor Option
-Pays two beneficiaries an income for life
*If one dies the payment to the survivor stays the same or is reduced. (100%, 75%, 66 2/3%, 50%)
Access to Cash Values While Insured is Living
-Policyowner makes decision
-Loan reduces the death benefit
*Interest is charged
*Fixed or variable
-If interest is not paid
*Loan automatically taken to pay interest
-Automatic Premium Loan
*Prevents lapse
*Interest is charged
-Cash values running out to
Dividend Options CARPPO
-Cash
-Accumulate at interest
-Reduce next premium amount
-Paid up additions-attained age
-Paid up policy
-One year term insurance-attained age
Policy Non-Forfeiture Options
-Surrender policy for cash
-Reduced paid-up insurance
-Extended term
Reduced Paid-Up Insurance
-Cash values used to buy new single premium policy
-Premium based upon insureds current (attained age)
-New policy has less insurance than the old policy
-New policy has immediate cash values
Extended Term
-Cash values buy single premium term insurance
-Same amount of insurance as old policy
-Only for a stated term of time
-Default option selected by the insurer