Under a multiple protection policy, the policy that pays on the death of the last person is called

Rationale

A survivorship life policy pays on the death of the last person insured.

This type of policy is specifically designed for two or more individuals, providing a death benefit only after the last insured individual passes away. It is commonly used in estate planning to cover potential estate taxes or provide financial support after both partners in a relationship have died.

A (a universal life policy) YOUR ANSWER

A universal life policy is a form of permanent life insurance that combines a death benefit with a cash value component. It does not stipulate payment only upon the death of the last insured; rather, it provides flexibility in premium payments and death benefits for a single insured individual.

B (a survivorship life policy) CORRECT

This policy is the correct answer as it specifically covers multiple individuals under one policy and pays out only when the last insured individual dies. It is often utilized in estate planning to ensure funds are available for taxes or other expenses upon the death of both insured parties.

C (a joint life policy) YOUR ANSWER

A joint life policy provides coverage for two individuals but pays out upon the death of the first insured. This means that financial support is available immediately after one person passes away, which differs from the survivorship life policy's structure.

D (an annuity life policy) YOUR ANSWER

An annuity life policy is primarily a financial product that provides regular payments to an individual, typically during retirement, rather than a death benefit. It does not relate to life insurance policies designed to pay out upon death, making it irrelevant to the question.

Conclusion

The survivorship life policy is distinctly designed to pay out only when the last insured individual dies, making it an essential tool in estate planning. Other options such as universal life, joint life, and annuity policies serve different purposes and do not share this characteristic, reinforcing the unique nature of survivorship policies in financial planning.

Under a multiple protection policy, the policy that pays on the death of the last person is called

A survivorship life policy pays on the death of the last person insured.

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