An insured has elected to receive $20,000 per month until the principal and interest on his wife's life insurance policy has been paid out. The insured has elected which option?

The interest only option provides payments that equal only the interest accrued on the policy's cash value, not the principal. This means the insured would receive payments based on the interest generated, which would not provide the $20,000 monthly amount stated, as it typically results in smaller payments that do not deplete the principal.

A fixed period option would provide payments for a specified time frame, regardless of the policy’s total value. This would not align with the insured's choice of receiving payments until the entire principal and interest have been paid out, which can exceed a fixed time duration.

The life income option guarantees payments for the lifetime of the insured, but the amount is based on the insured's life expectancy and the policy's value. This option does not provide a specific amount like $20,000 per month and does not pay out until the principal and interest are fully disbursed.