3. Which policy covering two or more individuals terminates after paying benefits only on the second death?
Answer: C
Survivorship life policy terminates after paying benefits only on the second death.
A survivorship life policy is designed to provide benefits after the death of the second insured individual, making it the correct answer to the question.
A) Family policy.
A family policy typically covers all family members under one policy, providing benefits upon the death of any insured individual. Therefore, it does not specifically terminate after the second death, making it incorrect.
B) Joint life policy.
A joint life policy insures two individuals and pays out upon the death of the first insured. This type of policy does not wait for the second death to pay benefits, which disqualifies it as the correct answer.
C) Survivorship life policy.
A survivorship life policy is specifically structured to pay benefits only after both insured individuals have passed away, which is why it is the correct choice in this context.
D) Limited payment whole life policy.
A limited payment whole life policy provides coverage for a specified period during which premiums are paid, after which the policy remains in force until death. It does not relate to the timing of benefits in relation to the deaths of multiple insureds, making it incorrect.
Conclusion
The survivorship life policy is definitively the correct answer as it uniquely pays benefits only upon the second death of the insured individuals. All other options either provide benefits upon the first death or do not pertain to the concept of covering multiple individuals in the same manner as the survivorship life policy. Thus, the other options fail to meet the criteria outlined in the question.