Achieve Financial Brilliance with the 2025 CFC Exam – Crack the Code to Consulting Success!

The correct answer is the joint and survivor option. This settlement option is designed to provide continuous income to two or more beneficiaries for as long as at least one of them is alive. In practical terms, this means that the payments continue until the last surviving beneficiary passes away, ensuring that a certain level of financial support is maintained for the entire duration of their lifetimes.

This option is particularly useful for couples or any co-beneficiaries who want to ensure that financial support is provided consistently for both parties. It helps protect the income stream against the risk of losing one beneficiary, thereby contributing to financial stability across the lifetimes of the individuals involved.

In contrast, the single life option only pays benefits for the lifetime of one individual; the fixed period option provides payments for a set number of years regardless of the beneficiaries' lifetimes; and the life with period certain option pays income for the lifetime of the beneficiary but guarantees a payment for a predetermined number of years regardless of whether they are alive. Each of these options serves different needs and preferences, but the joint and survivor option specifically addresses the situation where two or more beneficiaries are involved, ensuring continued payouts as long as one remains alive.