What provision in a life insurance policy prevents a beneficiary from changing or borrowing from planned installments?

The spendthrift provision in a life insurance policy is designed to protect the death benefit from being accessed by creditors and to ensure that it is paid out in a structured manner rather than as a lump sum. This provision prevents the beneficiary from changing how the death benefit is paid out—for instance, from installments to a lump sum—and from borrowing against the policy’s planned installments.

By enforcing the predetermined payout structure, the spendthrift provision helps preserve the financial resources intended for the beneficiary, shielding it from potential financial mismanagement or claims made by creditors. This ensures that the funds are used as intended by the policyholder, promoting responsible use of the benefit.

The other options serve distinct purposes and don’t relate directly to restricting beneficiary actions concerning the payout of the insurance benefits. The incontestability clause pertains to the validity of the policy after it has been in force for a certain period, the nonforfeiture option deals with maintaining some benefits if premiums are not paid, and the accelerated death benefit allows for advance payout under specific conditions, none of which are relevant to control over installment payments.