What is the term for a life insurance policy that pays on the death of the last insured?

The term for a life insurance policy that pays upon the death of the last insured is a survivorship life policy. This type of policy is designed to cover two individuals, typically spouses or partners, and it provides a death benefit only after both insured parties have passed away. This can be attractive for estate planning purposes, allowing beneficiaries to receive a substantial benefit after the last surviving insured's death, which can help cover estate taxes or facilitate financial legacy goals.

In contrast, a term life policy provides coverage for a specified period and only pays out if the insured dies within that term. A whole life policy offers lifetime coverage with a guaranteed death benefit and a cash value component. Universal life policy is a flexible permanent insurance option that allows for adjusting premiums and death benefits over time. Understanding the differences among these types of policies is crucial for selecting the right plan for specific financial objectives.