Another payment option is a payment-for-life program. As in the interest-only option, your beneficiary gets a periodic payment from the death benefit, which is a means of budgeting the funds while maintaining an investment. However, the amount the beneficiary receives is based on the terms you set up, the total amount of the death benefit and cash value, and the length of time you specify for the payments. With this option, the beneficiary can’t withdraw the funds but is guaranteed a payment for a specified period of time or for his or her lifetime.
Table 10-1 is a sample Life Income Table that specifies the minimum amount your beneficiary will receive each month if you and your beneficiary opt for this method of payment. Note that the amount is based on the beneficiary’s age and sex and whether you specify a number of years of payment or whether you leave the number of years open. As long as the beneficiary is alive, he or she receives equal payments at the end of each monthly interval. If you choose a specific time period, then payments continue as long as the beneficiary lives or to the end of the certain period, whichever is longer. If the beneficiary dies during the specified period, that person’s heirs get a lump sum payment of any balance owed.
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