Which of the following statements pertaining to life insurance policy settlement options is NOT correct?

Which of the following statements pertaining to life insurance policy settlement options is NOT correct?


A) Under the fixed-period option, the payment of excess interest will lengthen the payment period.

B) Payments under the interest-only option may be made at a rate higher than the guaranteed minimum.

C) By using the interest-only option, two or more settlement options can be combined for added flexibility.

D) Diane and Rhonda each are receiving monthly income from their deceased husbands' identical life insurance policies under the fixed-period option. Diane's payments are to be made for 15 years and Rhonda's for 20 years. Diane receives the larger monthly payments.



Answer: A) Under the fixed-period option, the payment of excess interest will lengthen the payment period.

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