Life Policy ProvisionsQuestion 159 of 716
Under which settlement option does the insurer retain the death benefit and pay only the earnings on it to the beneficiary at regular intervals?
a.Interest only
b.Fixed amount
c.Fixed period
d.Life-only income
Explanation
Under the interest-only settlement option, the principal remains with the insurer and the beneficiary receives only the interest credited on those proceeds, typically until a future date or until the beneficiary elects another option.
Law Reference: Cal. Ins. Code §10113This topic, taught in full in the California Life & Health Insurance Producer Exam guide. California Life & Health Insurance Producer Exam — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
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Related questions on this topic
- After a life insurance policy has lapsed for non-payment, the reinstatement provision generally requires which of the following from the policyowner?
- If an insured dies by suicide 18 months after the policy was issued, how is the death claim typically handled under the standard California suicide clause?
- If an applicant misstates their age on a life insurance application and the error is discovered after death, what action does the misstatement-of-age provision require?
- A beneficiary wants guaranteed equal payments for the next 20 years, even if she dies before that period ends, with any remaining payments going to her estate. Which settlement option meets this need?
- Which life-income settlement option provides the largest periodic payment to a single beneficiary, but stops entirely at that beneficiary's death with no refund?
- Which nonforfeiture option uses the cash value of a lapsed permanent policy to keep the same face amount in force as term insurance for as long as the cash value will last?
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PrepPass team · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)