A fixed payout is a settlement option that pays a policy's or annuity value in equal installments for life or a specified period. It converts accumulated value into predictable cash flow and may be elected by owners or beneficiaries. Once selected, options can be difficult to change. Taxation Depends on the source: life insurance proceeds paid under settlement options are generally income-tax free, while annuity payments are taxed under exclusion-ratio or LIFO rules.

Beneficiaries elect fixed period payments to receive steady income rather than a lump sum, or retirees annuitize a portion of assets to match monthly expenses. Advisors coordinate tax reporting and ensure the selected option fits budget and survivorship needs.