Final answer:
The correct answer is D. The life income option is the settlement option that pays life insurance proceeds to the beneficiary for as long as they live, acting much like an annuity and offering financial protection over the beneficiary's lifetime.
Step-by-step explanation:
The settlement option that provides life insurance proceeds to the beneficiary for the duration of their life is known as the life income option. This option essentially converts the death benefit into a stream of payments made regularly over the lifetime of the beneficiary, similar to an annuity. By choosing this option, the beneficiary has the security of receiving a guaranteed income for as long as they live.
Cash-value or whole life insurance policies offer not only a death benefit but also a cash value accumulation over time. This cash value can then be used by the policyholder for various purposes, such as borrowing against the policy. It's important to note that any loans taken against the policy's cash value typically need to be repaid with interest.
Life insurance is a fundamental financial protection method whereby policyholders periodically pay premiums to ensure that in the event of their passing, beneficiaries are supported financially. The life income option is one way to ensure that this support continues over the long term. Understanding these different settlement options is crucial for making informed insurance choices that align with personal financial goals and needs.