Which type of life insurance pays the death benefit upon the death of the second insured?

Survivorship life insurance, also referred to as second-to-die insurance, is specifically designed to pay out the death benefit upon the death of the second insured individual in a policy. This type of policy covers two people, often spouses, and is commonly used in estate planning to provide funds for beneficiaries after both insured parties have passed away.

Survivorship life insurance can be particularly advantageous for couples who wish to ensure that their heirs receive a tax-efficient inheritance or have funds available for estate taxes. This structure also generally allows for lower premiums compared to two separate life insurance policies on each individual, given that the payout is delayed until the death of the second insured.

In contrast, joint life insurance pays the death benefit upon the death of the first insured, which is mainly used for satisfying debts or obligations that arise immediately upon someone's passing. A family income policy provides a set amount of income for a specified period after the death of the insured, mainly focusing on income replacement rather than the timing of multiple deaths. Group life insurance typically covers a group of individuals — usually employees of a company — and pays out upon the death of any individual in the group, rather than the second insured. Thus, survivorship life insurance is the only option that accurately describes the