Minnesota Life Insurance License Practice Exam

What is a feature of joint life insurance policies?

1. They provide coverage for multiple individuals with separate contracts

2. They only cover one individual at a time

3. They pay out on the death of the first insured

4. They have a lower premium than term life insurance

The correct answer is: They pay out on the death of the first insured

Joint life insurance policies are specifically designed to cover two or more individuals under a single contract. A key feature of these policies is that they typically pay out a death benefit upon the death of the first insured individual. This means that when one person covered by the policy dies, the insurer pays out the death benefit to the beneficiaries. After this payout, the coverage for the remaining insured individuals under that same policy usually ends but can vary based on the policy terms. This structure allows families or businesses that have shared financial obligations to have a more streamlined approach to insurance. By having one policy covering multiple individuals, it can also simplify the insurance management process. The other options do not accurately reflect the characteristics or benefits inherent to joint life insurance policies, making the correct answer particularly relevant for understanding this type of insurance coverage.