Most often, life policies pay death claims in a single lump sum. The options that allow benefits to be paid other than lump sum are called __________.

• A. Settlement Options
• B. Lump Sum
• C. Installment Plans
• D. Death Benefit Schedules

Answer: (A)

Settlement options are the arrangements that let a life insurance death benefit be paid in ways other than a single lump sum. While many claims are paid all at once, settlement options provide alternatives such as periodic installments or lifetime income, with or without guarantees. That makes this term the correct description of the non-lump-sum payment methods. The other phrases don’t capture that specific concept: a lump sum is just one form of payment; installment plans is a generic phrase not the official term; death benefit schedules isn’t a standard term used for how proceeds are distributed.