Question 79

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

A survivorship life policy is designed to provide a death benefit to beneficiaries only after the second insured person has passed away. This means that the policy pays out the benefit on the last death, making it suitable for couples who wish to leave a legacy for their heirs.

A) On the first death

This option is incorrect because a survivorship life policy does not pay out upon the death of the first insured individual. Instead, it specifically requires both insured individuals to pass away before any benefit is disbursed.

B) On the last death

This option is correct as it accurately reflects the fundamental characteristic of a survivorship life policy. The policy pays the death benefit only after the last surviving insured person dies, thus meeting the policy's intended purpose of providing financial security for beneficiaries after both insured individuals have deceased.

C) On either death

This option is incorrect because a survivorship life policy does not provide coverage for either individual's death. The benefit is contingent solely upon the death of the last insured, which distinguishes it from other types of life insurance policies.

D) Only if both die simultaneously

This option is misleading and incorrect. While the policy pays out after the last insured's death, it does not require that both individuals die at the same time. The benefit is paid after the surviving insured passes away, regardless of the timing of each individual's death.

Conclusion

The correct answer, "on the last death," is definitive in describing how a survivorship life policy operates, as it only provides a death benefit after both insured individuals have passed away. All other options fail to accurately reflect the policy's structure, emphasizing the importance of understanding the specific terms associated with survivorship life insurance.