Life income settlement provides periodic income payments to the beneficiary for life or for a guaranteed period.

• A. Lump sum
• B. Periodic income payments for life or guaranteed period
• C. Fixed premium payments
• D. Death benefit conversion to cash value

Answer: (B)

A life income settlement converts the death benefit into a stream of periodic payments. The payments continue either for the beneficiary’s life or for a guaranteed period, providing ongoing income rather than a single lump sum. The guaranteed period option ensures payments are made for a minimum term even if the recipient dies early, while the life-only option ends with the recipient’s death. This focus on regular, guaranteed income aligns exactly with the description in the question, distinguishing it from lump-sum or fixed-term payment options that do not depend on the recipient’s longevity.