A settlement option determines how the death benefit is paid to beneficiaries.

• A. A method of paying the death benefit to beneficiaries
• B. A method of determining underwriting class
• C. A rider for accidental death
• D. A method of premium payment

Answer: (A)

Settlement options govern how the death benefit is paid to beneficiaries. They specify the form and timing of the payout after death—for example, a single lump-sum payment or periodic payments such as fixed-period installments, fixed-amount installments, or life income (with or without refund). This concept is distinct from underwriting class (which affects insurability and premium rates), a rider for accidental death (an added coverage), or premium payment methods (how premiums are paid during life). So describing settlement options as a method of paying the death benefit to beneficiaries correctly captures what they determine.