Definition of "Fixed Amount Option"

A life insurance proceeds settlement option whereby the amount of monthly payment is set or fixed by the policy owner. The number of payments is determined by the amount of proceeds. (An example would be electing to receive $1,000 a month for as long as the proceeds last.)

A type of death benefit settlement option in a life insurance policy that pays the death benefit in a series of fixed amounts. The death benefit is left on deposit with the insurance company and earns interest. The insurance company makes payments of the specified amount until the benefit and interest has been exhausted.