A joint life insurance policy covering two insureds pays the death benefit:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A joint life policy is a first-to-die contract: it covers two lives under one policy and pays the death benefit when the first insured dies, after which coverage on the survivor typically terminates. It is commonly used where a lump sum is needed at the first death, such as funding a business transfer or providing income for a surviving spouse. It contrasts with survivorship, or last-survivor, insurance, which pays only on the second death. The premium for joint life reflects the probability that at least one of the two insureds will die, and it is usually lower than two separate policies. Understanding the difference between first-to-die and last-to-die products is a core policy-type distinction.
Why the other options are wrong
- Paying only when both insureds have died describes a survivorship or last-survivor policy, which is designed to pay on the second death, not the first.
- No policy pays the death benefit merely because the surviving insured reaches age 100; joint life pays at the first death whenever it occurs.
- The death benefit is paid on death, not at the survivor's retirement; retirement is not a triggering event for a joint life policy.
Memory hook
Joint life pays on the first goodbye; survivorship waits for the second. First versus last decides the policy.