Tennessee Insurance Practice Exam

Which statement concerning settlement options is NOT true?

1. Only the policy owner may select

2. The beneficiary can select among options

3. Settlement options are available to the insured

4. Only the beneficiary may select

The correct answer is: Only the beneficiary may select

The statement that is not true in relation to settlement options is one suggesting that only the beneficiary may select. Typically, the policy owner has the authority to choose among the settlement options when the policy is issued. This means that the policy owner can dictate how the benefits will be distributed upon their passing. While beneficiaries have some rights regarding settlement options, such as being able to choose among the options if designated to do so by the policy owner, it is primarily the policy owner's decision at the outset. In some cases, the beneficiary may have the right to make selections if the owner has explicitly granted that right; otherwise, the authority can reside exclusively with the policy owner. Understanding the roles of the policy owner and beneficiary in selecting settlement options is crucial, as it defines who has the final say in how the benefits are disbursed. This concept is essential in insurance practices and policy management.