Which of the following best describes a lump sum settlement?

A lump sum settlement refers to a single, immediate cash payment made to the beneficiary upon the death of the insured individual. This type of settlement is designed to provide a straightforward and quick financial solution for beneficiaries, enabling them to receive the entire benefit amount at once instead of having to wait or manage multiple payments over time.

This contrasts with other settlement options such as those that involve payments over fixed intervals, interest payments spread out over a specific duration, or joint income payments that cater to multiple recipients, all of which distribute the payout over time rather than providing a complete payout immediately. The immediacy and simplicity of a lump sum payment ensure that beneficiaries have ready access to funds for immediate needs such as funeral expenses, outstanding debts, or other financial obligations that arise upon the death of the insured.