What is a settlement option

What is a settlement option?

When life insurance proceeds are paid to a living policyowner or to beneficiaries, they are paid under a settlement option.

These options are:

(1) a lump-sum cash payment;

(2) monthly payments continuing until all proceeds and interest are paid;

(3) lifetime income payments;

(4) payments of interest on proceeds remaining with the insurer under the interest option.

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When can my policy lapse and what can I do if this happens

When can my policy lapse and what can I do if this happens?

Your policy can lapse or terminate when a premium is not paid by the end of the grace period, if the policy has no cash value. If the policy has adequate cash value, you can borrow against it to pay the premium and maintain your insurance. You could also use one of the policy's non-forteiture options which allow you to:

(1) surrender your policy and collect its cash value;

(2) purchase a reduced amount of paid-up cash value life insurance;

(3) purchase the same amount of term insurance that you purchased originally and extend your coverage for a specified time period.

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If I miss a premium payment will I lose my insurance coverage

If I miss a premium payment, will I lose my insurance coverage?

If you pay the premium within the grace period following the due date, you will not be subject to a penalty or loss of coverage.

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