Settlement option paying a chosen dollar amount until funds (plus interest) are exhausted:

The correct answer refers to a settlement option that provides a specific dollar amount to the policyholder or beneficiary until the funds, along with any accrued interest, are fully depleted. This option allows the recipient to receive regular payments of a predetermined amount, giving them control over how long the funds will last based on their withdrawal rate.

In this option, emphasis is placed on how the insured or beneficiary receives the payments, making it a preferable choice for individuals who wish to budget their funds over a specific period while ensuring they receive a consistent income. The payments will continue until both the principal amount and the interest are completely exhausted, which provides a transparent and predictable financial arrangement.

Other settlement options may offer different mechanisms or considerations, such as the fixed period option, which pays out over a defined timeframe regardless of the balance. The interest-only option involves receiving only the earned interest on a principal amount, and the life income option guarantees payments for the lifetime of the insured or beneficiary but does not focus on the withdrawal of a fixed dollar amount that can be managed. The fixed amount option stands out by ensuring that the recipient can withdraw a specific dollar amount, thus allowing for tailored financial planning.