Which provision in a life policy specifies how proceeds will be paid to a beneficiary upon the death of the insured?

The provision in a life insurance policy that specifies how proceeds will be paid to a beneficiary upon the death of the insured is known as settlement options. This section outlines the various methods through which the beneficiaries can receive the death benefit, calling attention to choices such as lump sum payments, annuitized payments, or other structured disbursement strategies.

By delineating these options, the settlement provision ensures that beneficiaries understand their choices and allows for greater flexibility in how they wish to receive their benefits. It serves a critical role in guiding the disbursement process after the insured individual's passing, making it essential for aligning the policy's benefits with the financial needs and goals of the beneficiaries.

The other choices do not directly refer to the payment methods of the life insurance proceeds to the beneficiaries. For instance, the beneficiary clause identifies who is entitled to receive the death benefits, while the suicide clause has stipulations regarding claims in the event of the insured's suicide. The cash value clause relates to the accumulation of cash value in some types of life insurance policies and is not concerned with the payment of proceeds upon death.