Two spouses purchase a life insurance policy that pays the death benefit when the first spouse dies. This policy is called:

Why A is correct

Joint life insurance covers two lives under one policy and pays the death benefit on the first to die. It is commonly used by spouses or business partners who want funds available when the first insured dies, and it is generally less expensive than two separate policies. Joint life policies are often purchased to protect income or fund a plan that depends on the first death. Because only one death benefit is paid, the coverage ends when the first insured dies.

Why the other options are wrong

• B) Survivorship, or last-survivor, insurance pays at the second death, not the first, and is designed for estate planning rather than first-death income protection. It pays only after both insureds have died and is used for estate tax planning.
• C) Family income coverage is a rider that pays monthly income on the insured's death; it is not a two-life first-to-die contract. That rider pays on the death of a single insured and covers one life rather than two.
• D) Convertible term is an individual term policy with a conversion option; it covers one life and does not pay on the first of two deaths. A convertible term contract covers one life and has no first-of-two-deaths trigger.

Memory hook

First to go triggers the check in joint life; last to go triggers it in survivorship.