Life Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
Two business partners each purchase coverage under a single policy that will pay the death benefit when the first of them dies. This policy is best described as:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A joint life policy covers two or more insureds and pays the death benefit upon the first death. This structure is commonly used in business settings, for example to fund a buy-sell agreement so the surviving partner has cash to purchase the deceased partner's interest, or by couples needing income when one spouse dies. The policy typically terminates or converts after the first death. This differs from a survivorship (last-to-die) policy, which pays only when the second insured dies.
Why the other options are wrong
- B) A survivorship (last-to-die) policy pays when the second of the two insureds dies, not the first.
- C) A key person policy covers a single vital employee and pays the company on that person's death.
- D) A family maintenance policy provides income to a family for a set period after the insured's death, not a joint first-to-die structure.
Memory hook
Joint life = pays on the first to go. Survivorship = pays on the last to go.