Rhode Island Life Insurance Practice Exam

Under which condition is the face amount paid out under a Joint Life and Survivor policy?

1. At the end of the term

2. Upon the death of the first insured

3. Upon death of the last insured

4. Whenever the policyholder demands

The correct answer is: Upon death of the last insured

The face amount of a Joint Life and Survivor policy is paid out upon the death of the last insured. This type of policy is commonly used between two individuals, often couples, where the intent is to provide financial protection until both individuals have passed away. In a Joint Life and Survivor policy, the coverage remains in force as long as at least one of the insureds is alive. Therefore, the benefit is only disbursed after the death of the last surviving insured, which is crucial for ensuring continued financial support for beneficiaries after both individuals have died. The other conditions described, such as payment at the end of the term or upon the death of the first insured, do not apply to this type of policy. A Joint Life policy may pay out upon the first death, but in a Joint Life and Survivor context, the key point of differentiation is the survival of both parties until the last one passes away. The notion of demanding payment whenever the policyholder wishes does not align with the structured nature of life insurance benefits, which are contingent upon specific events such as the deaths of the insured individuals.