66. A beneficiary has chosen to receive the payout from her husband's life insurance policy so that she will receive an Income for the next 10 years. At the end of that time, the entire proceeds from the policy will have been paid out. The beneficiary has selected
Answer: B
The beneficiary has selected a fixed period payout option.
The beneficiary has chosen a fixed period option to receive payouts from her husband's life insurance policy for a duration of 10 years, at which point the entire proceeds will have been disbursed.
A) fixed amount.
The fixed amount option involves receiving a specific sum of money at regular intervals, but it does not specify a set duration like the fixed period option. This choice would not guarantee that the funds would be exhausted after 10 years, making it incorrect in this context.
B) fixed period.
The fixed period option allows the beneficiary to receive payments for a predetermined duration, in this case, 10 years. This aligns perfectly with the description provided, as it ensures that the entire proceeds will be distributed by the end of the specified period.
C) life income.
The life income option provides payouts for the lifetime of the beneficiary rather than a fixed timeframe. This choice would not meet the requirement of exhausting the policy proceeds in 10 years, thus making it an incorrect option.
D) interest only.
The interest only option would provide the beneficiary with only the interest accrued on the policy proceeds, rather than the full amount. This is not consistent with the scenario, as the beneficiary expects to receive the full proceeds over a defined period.
Conclusion
The fixed period option is the only choice that correctly reflects the beneficiary's intention to receive payments over a set duration of 10 years, ensuring that the total policy proceeds are distributed within that time frame. All other options either fail to meet the time constraint or do not provide the total payout as required.