Arizona Life and Health Practice Exam

Which life insurance settlement option provides lifetime benefits to two or more people?

1. Life income option

2. Joint and Survivor

3. Fixed amount installment option

4. Cash surrender value

The correct answer is: Joint and Survivor

The Joint and Survivor settlement option is designed to provide lifetime benefits to two or more individuals, typically a couple. This option ensures that as long as one of the insured individuals is still living, the benefits continue to be paid, even if the other has passed away. This arrangement is particularly beneficial for couples who want to ensure financial support for the surviving partner, affirming the security of income that lasts a lifetime for both. In this option, the payment amount may decrease after the first death, but the key feature remains that payments continue for the survivor for life. It accommodates the needs of joint beneficiaries, aligning with the goal of maintaining financial stability for loved ones even after the death of one partner. The other options do not provide lifetime benefits to multiple individuals in the same manner. The life income option generally pays benefits to a single individual, fixed amount installment focuses on a specified sum over time rather than lifelong payments, and cash surrender value pertains to the amount available if a policy is canceled, thus not related to settlement options for living beneficiaries.