Minnesota Life Insurance License Practice Exam

What type of life insurance covers two spouses under a single contract and pays out upon the first death?

1. Whole life insurance

2. Term life insurance

3. Joint life insurance

4. Universal life insurance

The correct answer is: Joint life insurance

Joint life insurance is designed to cover two individuals, typically spouses, under a single policy. The key feature of this type of insurance is that it pays out a death benefit upon the death of the first insured person. This can provide financial security for the surviving spouse, as the payout can be used to cover expenses or replace income lost due to the death. This type of policy differs from individual life insurance policies, where each insured has their own separate contract. Joint life insurance can be particularly beneficial for couples looking for a cost-effective solution to ensure that financial obligations are met after one partner passes away. While whole life, term life, and universal life insurance can offer coverage for individuals, they do not have the specific structure of covering two individuals in one policy with a payout upon the first death. Whole life insurance provides coverage for the life of the insured with cash value accumulation. Term life insurance offers coverage for a specified period without any cash value, and universal life insurance provides flexible premiums and death benefits with a cash value component. None of these options specifically combine two insured members into one contract in the manner that joint life insurance does.