What payment structure characterizes a survivorship life insurance policy?

A survivorship life insurance policy is designed to provide a death benefit that is paid out after the last surviving insured person dies. In this structure, the policy covers two individuals, usually spouses, and it does not pay out until both individuals have passed away. This can make it an effective tool for estate planning, allowing heirs to receive financial support and potentially cover estate taxes after both parents are deceased.

The key characteristic that defines this type of policy is its focus on the last death rather than the first. Hence, while some other insurance policies pay out upon the death of the first insured, survivorship life specifically waits until both have passed. This unique feature is beneficial for individuals looking to leave a legacy or manage their estate efficiently.