How does a "joint life insurance policy" work?

A joint life insurance policy is specifically designed to insure the lives of two individuals under a single policy. The primary feature of this type of policy is that it pays out a benefit upon the death of the first insured person. This can be particularly advantageous for couples or partners, as it provides financial support to the surviving individual when one passes away.

The reason this option is correct lies in the policy's structure and purpose; it is intended to address the financial ramifications of losing one of the insured individuals. Upon the death of the first person, the policy benefits are payable, thus offering immediate financial relief to the remaining insured or their beneficiaries.

The other options describe arrangements that do not accurately define a joint life insurance policy. For example, a policy that pays out at the end of the term doesn't align with how joint life policies function, as these policies focus on the event of a death rather than the passage of time. Similarly, the concept of paying out upon the death of the second insured pertains to a different type of policy called a survivorship life insurance policy, not a joint life policy. Lastly, a policy that covers multiple lives and pays out every year doesn't accurately represent the typical mechanics of joint life insurance, which centers around a death benefit triggered by the