AD Banker Comprehensive Practice Exam

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Enhance your exam readiness with the AD Banker Comprehensive Exam guide. Includes flashcards and multiple-choice questions with explanations.

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Which settlement option provides for the proceeds plus interest to be paid in installments for a specified period of time?

Life income period certain option
Joint life option
Fixed amount option
Fixed period option

The correct answer is: Fixed period option

The correct answer, which refers to the fixed period option, is defined by its method of disbursing policy proceeds. This option allows for the payment of life insurance proceeds, along with accrued interest, to be made in a series of installments over a designated period. Hence, the beneficiary or policyholder receives steady income for the selected time frame, ensuring that they have a predictable flow of funds while also benefiting from the interest accumulation on the principal amount during that period. This option is particularly advantageous for a policyholder who desires a structured payout schedule without necessarily requiring a lifetime income or having to manage a lump sum immediately. It suits those looking to budget their finances more effectively over a set duration.