Final answer:
John's beneficiary would receive a cash refund of $120,000 if John dies five years after selecting a life income option of $2,000 per month with ten years certain, because there would be five years of payments remaining.
Step-by-step explanation:
The student is asking about a specific financial scenario involving a life income settlement option and the consequences of the person's death before a certain period is elapsed. When John picks a settlement option that provides a life income of $2,000 per month with ten years certain, it means that the income will be paid out for life, but if John dies before the ten-year period, the payments will continue to the beneficiary until the end of the ten-year period.
In John's case, since he dies after five years, there would be five years remaining on the certain period. To calculate the cash refund to the beneficiary, we multiply the monthly income by the number of months remaining: $2,000 x 12 months x 5 years = $120,000. Therefore, the beneficiary would receive a cash refund of $120,000.