Question 79

A survivorship life policy pays the death benefit on the last death.

A survivorship life policy is designed to pay out the death benefit only after both insured individuals have passed away. This structure is often used in estate planning to provide financial support to beneficiaries after the second death.

A) On the first death

This option is incorrect because a survivorship life policy does not provide a benefit upon the first death. Instead, it is specifically designed to delay the payout until the death of the second insured individual.

B) On the last death

This option is correct as a survivorship life policy pays the death benefit only after the last of the insured individuals has died. This feature allows for the accumulation of a larger death benefit that can be beneficial for estate planning purposes.

C) On either death

This option is incorrect because a survivorship life policy distinguishes itself by not paying out upon the death of either insured individual. The intent is to provide a financial benefit only after both have deceased.

D) Only if both die simultaneously

This option is also incorrect as it suggests a condition that is not a requirement of a survivorship life policy. The policy pays out after the last death, regardless of whether the deaths are simultaneous or occur at different times.

Conclusion

In summary, the key feature of a survivorship life policy is that it pays the death benefit on the last death, making option B the only correct choice. The other options fail to accurately represent the nature of this type of insurance, which is specifically designed to provide a benefit only after both insured individuals have passed away.