If neither the policyowner nor the beneficiary chooses a settlement option, what will the insurer default to?

When neither the policyowner nor the beneficiary selects a settlement option, the insurer typically defaults to a lump-sum payment. This means that the death benefit will be paid out in one complete payment rather than through any structured settlement options such as annuities or installments.

The rationale behind this practice is to simplify the disbursement process and ensure that beneficiaries receive the full amount promptly. A lump-sum payment allows beneficiaries to use the funds as they see fit, whether it's for immediate expenses, long-term investments, or any other financial need. This default option is generally seen as the most straightforward and beneficial for most situations.

Other settlement options, like annuities or installment payments, can complicate the process, involve additional administrative handling, and may not meet the immediate financial needs of beneficiaries. Therefore, the default to a lump-sum payment serves to streamline the resolution of the policy's benefits when no preference has been indicated by the involved parties.