The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?

Question

Social Studies

Madelynn Huffman

19 October, 06:02

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?

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Answers (1)

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Laney Gill · Answer 1

interest only option

Explanation:

Interest only option -

In this settlement option, the company keeps the policy proceeds and pay the only pay the interests to the person during the regular interval, is known as the interest only option.

Same is the case given in the question,

where,

the policy owner need to be sure that the amount after his death, would be payed to his spouse and the principal amount to the children as soon as they reach a certain age, hence, the settlement option to be considered by the policy owner should be interest only option.