Interest Only Settlement Option

« Go Back


TermInterest Only Settlement Option
What does Interest Only Settlement Option mean? This is a life insurance settlement option in which the insurance company keeps the proceeds from the life insurance policy and invests it, promising the beneficiary a guaranteed minimum rate of interest.

How the exam might test Interest Only Settlement Option: this option acts like a certificate of deposit, though often with higher rates of interest. Beneficiary's payment may increase or decrease in the future. Owner of policy may make withdrawals of money from the account.