Annuitization: The election to receive payments from the annuity for life, or for a specified period depending on the settlement option selected.

Annuitization: The election to receive payments from the annuity for life, or for a specified period depending on the settlement option selected.

• A. Underwriting
• B. Policy surrender
• C. Annuitization
• D. Conversion

Answer: (C)

Annuitization is the process of converting a lump sum into a stream of payments that can continue for life or for a specified period, depending on the settlement option chosen. This description fits because it describes electing how the funds will be paid out—either for the recipient’s lifetime or for a defined period—rather than simply evaluating risk, surrendering a policy, or converting to another policy type. Underwriting involves assessing risk to issue coverage, policy surrender means cashing out a policy, and conversion refers to changing one policy form into another. None of those describe the arranged payout pattern that annuitization establishes.

Annuitization is the process of converting a lump sum into a stream of payments that can continue for life or for a specified period, depending on the settlement option chosen. This description fits because it describes electing how the funds will be paid out—either for the recipient’s lifetime or for a defined period—rather than simply evaluating risk, surrendering a policy, or converting to another policy type. Underwriting involves assessing risk to issue coverage, policy surrender means cashing out a policy, and conversion refers to changing one policy form into another. None of those describe the arranged payout pattern that annuitization establishes.