Which settlement option provides a guaranteed income stream for a period of time?

The correct choice is the annuity settlement option because it is specifically designed to provide a guaranteed income stream over a specified period of time. An annuity transforms a lump sum of money into a series of periodic payments to the policyholder or their beneficiaries. This structure is particularly beneficial for those who wish to have stable income during retirement or for a specific time frame, as it mitigates the risk of outliving their assets.

In contrast, a term policy refers to life insurance coverage for a specific term and does not provide income after the policyholder's death; it only pays a death benefit if the insured dies during the coverage period. A lump sum payment is a one-time payment made to the beneficiary upon the death of the insured, which does not guarantee ongoing income but rather provides a single payment to be used at the beneficiary's discretion. Cash value withdrawal pertains to accessing the accumulated cash value in a permanent life insurance policy and does not create an income stream but rather reduces the available benefit of the policy and potentially lowers the death benefit.