List and describe briefly the various settlement options under life insurance contracts. Explain the purpose of...

List and describe briefly the various settlement options under life insurance contracts.
Explain the purpose of the annuity contract in a financial plan.

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Expert Solution

A The various settlement options under life insurance contracts are as follows:-

1.Lump Sum option:- It offers through settlement in one lump sum account.

2.Interest income option- This type of settlement options offers through receipt of payment in interest mode only.

3.Life income option- This type of settlement means that beneficiary will recieve payment throughout the lifetime.

4.Periodic certian- This type of settlement option provides with fixed periodic payment for a certain amount of time.

5.Life refund- This type of settlement option have fixed periodic payment until the payment is equal to payment in lump sum account.

6.Joint and survivor- This type of settlement option provides with payment to two beneficiary till one of them is alive.

2. The importance of Annuities are as follows-

A. Annuities are often used to help individual pay for long term medical care or disability

B. Annuities are used as tax shelter for different types of individuals.

C.Annuities are most commonly used for retirement planning.

D. It helps in tax deferment with safety and guaranteed income.

jeff jeffy answered 1 year ago

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