What is the type of policy that pays upon the death of the last insured individual?

The type of policy that pays upon the death of the last insured individual is known as Survivorship Life. This policy specifically covers two or more individuals but is designed to pay out the death benefit only after the last insured person passes away.

Survivorship Life policies are often used in estate planning because they can help to provide liquidity to an estate that may be subject to taxes upon the passing of the last insured. This can be particularly strategic for couples or business partners, as the death benefit can be used to cover expenses or settle financial obligations after both insured individuals have died.

Understanding the function of Survivorship Life is crucial for financial planning, as it differs from policies like Joint Life or any of the other options, which may pay out on the death of the first insured individual rather than waiting until the last one has died.