The type of policy which pays on the death of the last person is called?

The type of policy that pays out upon the death of the last insured person is known as survivorship life insurance. This policy typically covers two or more individuals and is specifically designed to provide a benefit only after the last surviving person passes away. It is often used for estate planning purposes, particularly to help cover estate taxes or to ensure that heirs receive an inheritance after both insured individuals have died.

By concentrating the payout to occur with the passing of the last insured, survivorship life policies can often offer lower premiums compared to traditional joint life policies, where benefits may be paid at the death of the first insured. This distinction makes survivorship life particularly appealing for certain financial planning strategies, where the focus is on the long-term financial security of beneficiaries after both insured individuals have passed.