Which settlement option ensures the principal never decreases unless withdrawals are made?

The interest only option is designed to pay out only the interest earned on the principal amount of the insurance policy or investment. This means the principal itself remains intact and is not reduced as long as no withdrawals are made. The funds continue to earn interest, ensuring the principal does not decrease over time.

This is in contrast to some of the other options. For example, the life income option typically involves converting the principal into an income stream for the lifetime of the insured, which could lead to the principal being fully paid out by the end of that period. The fixed period option also pays out over a certain duration of time, which would deplete the principal if the full amount is distributed within that fixed period. Thus, the interest only option distinctly maintains the principal intact while allowing for the accrual of interest.