In a survivorship life policy, when is the death benefit paid out?

In a survivorship life policy, the death benefit is paid out only upon the last death of the insured individuals covered by the policy. This type of policy insures two people, typically spouses, and is designed to provide a benefit that can be used to cover estate taxes, provide for heirs, or fulfill other financial obligations after both insured parties have passed away.

Because the policy is structured this way, it is often utilized in estate planning, allowing the beneficiaries to receive a larger payout upon the second death, when financial needs might be more significant, particularly in terms of settling the estate or providing for heirs. This characteristic sets it apart from other life insurance policies that may pay immediately upon the first death, which is not the case here, as the focus is on the total death benefit being available after the last surviving insured has died.