What is a common method for beneficiaries to receive a death benefit?

Beneficiaries often receive death benefits through various settlement options, which provide flexibility in how the funds can be accessed. This approach allows beneficiaries to choose among multiple payment methods based on their individual financial situations or preferences. Some common settlement options include lump-sum payments, which provide the full amount at once, or structured payouts, such as installment payments over a specified period or an annuity, which can provide a steady income stream.

The availability of multiple settlement choices can help beneficiaries manage the death benefit funds more effectively, whether they need immediate funds to cover expenses or prefer a long-term financial strategy. This flexibility is particularly important because different beneficiaries may have different needs and circumstances that influence how they would like to receive the benefits.

The other options are more limited in scope. Receiving benefits only as an annuity or only in a single payment restricts the choices available to beneficiaries, failing to accommodate varying financial needs. Similarly, a trust fund adds another layer of complexity and is not a direct method by which most beneficiaries typically receive death benefits, as it often necessitates additional legal processes.