Fixed period settlement options are considered to be a form of a(n)?

• A. Bond
• B. Annuity
• C. Pension plan
• D. Savings account

Answer: (B)

Fixed period settlement options distribute the death benefit as a series of payments over a definite span of years. This creates a stream of payments similar to an annuity, where funds are paid out on a schedule for a set term. In life insurance, choosing a fixed period means the proceeds are allocated to provide regular payments for the specified number of years, which is why it’s classified as an annuity-type arrangement.

It's not a bond, because bonds are debt instruments issued by entities that pay interest and return principal at maturity. It's not a pension plan, which is an employer-sponsored retirement program, and not a savings account, which is a deposit account offering funds on demand or with simple interest.