Available with select Protective policies, the Income Provider Option can be a potential solution for meeting the income needs of beneficiaries. This optional benefit allows policy owners to choose the amount and duration of death benefit payments — giving them the flexibility to address their intentions and concerns.
The typical life insurance policy death benefit is paid in one lump sum. That might help to meet immediate and short-term financial needs, but may not be the best option for others who need help covering periodic and ongoing expenses or if the owner is worried about a spendthrift beneficiary.
Since the death benefit is being deferred, the premium will be lowered. However, given the current interpretation of the tax law, a % of each installment will be reported as taxable income to the beneficiary because the death benefit is being paid over a period of time.