An insured has chosen to receive the payout from her husband's life insurance policy so that she will receive payments until the proceeds from the policy will have been paid out. The insured has selected which option?

Selecting the interest-only option means the insured would receive only the interest earned on the policy proceeds, rather than accessing the principal amount. This choice does not fulfill the requirement of receiving payments until the entire policy amount is paid out, making it an unsuitable option for her needs.

The fixed amount option allows the insured to receive a consistent payment amount until the policy proceeds are depleted. However, this option does not guarantee that payments will continue for a set period, as the total duration would depend on the chosen fixed payment amount relative to the total proceeds, making it less aligned with her intent.

Choosing the life income option would provide payments for the duration of the insured's life, but the payments would cease upon her death, regardless of whether the policy proceeds have been fully paid out. Thus, this option does not meet the requirement of complete payout within a specified timeframe.