Which life insurance settlement option pays the beneficiary a guaranteed income for life?

The life income settlement option is designed specifically to provide the beneficiary with a guaranteed income for the duration of their life. This option ensures that the insured's beneficiary receives periodic payments based on the amount of the life insurance benefit, which is then converted into an annuity that guarantees income for as long as the beneficiary lives.

This option is particularly beneficial for individuals who seek financial security, as it alleviates the risk of outliving their resources. It offers peace of mind knowing that they’ll receive a steady income stream, regardless of how long they live.

On the other hand, the fixed period option would pay out benefits over a specified duration, but it doesn’t guarantee payments for the lifetime of the beneficiary. The fixed amount option pays a specific dollar amount until the proceeds are exhausted, which may not last for the entirety of the beneficiary's lifetime. The interest-only option involves the insurance company retaining the death benefit while paying out only the interest earned on that amount, which does not provide any guaranteed income for life.