Which policy pays out only after the second death among insured individuals?

• A. Term life policy
• B. Second-to-die policy
• C. Whole life policy
• D. Universal life policy

Answer: (B)

Payouts after the second death come from survivorship or second-to-die life insurance. This type covers two people and is designed so the death benefit is paid only when the second insured person dies. It’s a common tool in estate planning to provide liquidity for estate taxes, debts, and final expenses or to equalize inheritances without needing a payout during the lifetimes of both individuals.

Other life policies are single-life products. A term life policy pays if the insured dies within a specified term. A whole life policy provides lifelong coverage and pays upon the death of the insured, with a cash value component. A universal life policy is a flexible permanent policy that also pays on the death of the insured. None of these are structured to pay only after two lives have died.