Final answer:
The frequency of premium payments impacts the cost of an insurance policy due to potential processing fees and the risk of policy lapse. It does not directly affect settlement options, cash value, or death benefit of the policy. Option D is correct.
Step-by-step explanation:
The frequency of an insurance policy's premium payments affects the cost of the policy. When premiums are paid more frequently, such as monthly instead of annually, there can be additional administrative fees or higher rates overall. This is because each payment may incur processing charges and the insurance company may adjust for the increased risk of lapse when premiums are due more frequently.
Settlement options, cash value, and death benefit generally are not affected by the premium payment frequency. The cash value accrues over time based on the policy's terms and the premiums paid, but it's not directly influenced by the payment frequency. Likewise, the death benefit is determined by the amount of coverage purchased, not the payment schedule. The settlement options available to beneficiaries upon the insured's death are also typically independent of premium payment frequency.