Which option is not a component of basic settlement options?

In the context of basic settlement options for life insurance policies, the automatic premium loan is not considered a settlement option. Basic settlement options refer to the methods by which the death benefit or cash value of a policy is paid out to the policyholder or beneficiary, and they typically include choices such as fixed amount, life income, and fixed period options.

The fixed amount option allows beneficiaries to receive a specific amount of money at regular intervals until the death benefit is fully paid out. The life income option provides a steady stream of income for the beneficiary for their lifetime, ensuring they do not outlive the benefits. The fixed period option pays out the death benefit over a specified period, allowing for planned distributions.

On the other hand, an automatic premium loan is a feature of a whole life insurance policy that automatically pays overdue premiums by borrowing against the policy's cash value. While it is an important component of how policy loans are handled, it does not fit within the framework of basic settlement options that dictate how benefits are disbursed upon a claim. Thus, it is clear that the automatic premium loan is separate from the defined settlement methods.