What does a life income settlement option base its payments on?

The life income settlement option is designed to provide a steady stream of income to the recipient over their lifetime. This option calculates payments based on the life expectancy of the recipient, ensuring that the financial arrangement continues for as long as they are alive.

This method considers various factors, such as the recipient's age and gender, as these can influence life expectancy estimates derived from actuarial tables. By basing the payments on the expected lifespan, the insurer can structure the income to last for the duration of the recipient's life, making it a reliable option for those looking for sustained financial support.

Other options do not align with how life income settlements are structured. For instance, the financial status of the beneficiary or the insured's health history might be relevant in other contexts, such as underwriting or determining eligibility for coverage, but they do not directly affect the calculations for a life income settlement. Similarly, while a company's risk assessment plays a role in the overall underwriting process and pricing of insurance products, it does not specifically dictate how payments are calculated in the context of a life income settlement.