Utah Life Producer Practice Exam

Survivorship life insurance is specifically designed to cover two individuals, typically spouses, and it pays out a death benefit only after the passing of the second insured person. This type of policy is often used for estate planning purposes, allowing beneficiaries to manage financial liabilities such as estate taxes after both individuals have died.

The appeal of survivorship life insurance lies in its ability to provide a substantial benefit that can be used to preserve the estate or pass on wealth to heirs, ensuring that the financial needs are met after both insured parties have passed. This distinguishes it from standard life insurance policies that provide benefits upon the death of the insured individual, which is not the case with survivorship policies.

Other options do not accurately reflect the nature of survivorship life insurance. A single individual's life insurance would cover only one person, while policies aimed at families with children are typically term or whole life policies rather than survivorship. Coverage for individuals with chronic health conditions is also unrelated to the survivorship concept, as it speaks more to insurability and underwriting considerations rather than the structural design of the coverage itself. Thus, option B is the accurate representation of what survivorship life insurance entails.