What does the fixed amount option entail?

The fixed amount option entails a specific amount paid in installments, making it a structured way to distribute life insurance benefits over time. Under this option, the beneficiary receives a predetermined sum of money on a regular basis until the total death benefit is fully disbursed. This can provide a consistent source of income that the beneficiary can plan for, offering financial security during a potentially difficult time.

In contrast, other options may not provide the same fixed structure. For instance, equal payments until the proceeds are exhausted would suggest a distribution based on the total amount rather than a set sum, meaning the payment amount could be variable depending on the total benefit. A lifetime income guarantee suggests a different financial arrangement that typically focuses on a guaranteed income for as long as the beneficiary lives, rather than a fixed sum installment, which is distinct from the fixed amount option. Lastly, interest payments on retained proceeds would indicate earnings on the policy's remaining balance rather than direct payments to the beneficiary, further differentiating it from the fixed amount approach.