What type of life policy covers two people and pays upon the death of the last insured?

The type of life policy that covers two people and pays out upon the death of the last insured is known as a Survivorship policy, also referred to as a second-to-die policy. This policy is specifically designed to provide a death benefit after both insured individuals have passed away. Typically, these policies are used for estate planning purposes, as the death benefit can help cover estate taxes or provide for heirs after both insured individuals die.

Survivorship policies are advantageous in that they often have lower premiums compared to purchasing two individual life insurance policies, since the payout occurs only after the second death. This feature makes them particularly appealing for couples or business partners looking to ensure their beneficiaries are financially supported in the future.

The other options either do not relate to covering two individuals specifically or provide benefits upon the death of the first insured rather than the last. For example, Term Life policies are designed to provide coverage for a specific period and pay out upon the death of the insured during that term, while Whole Life and Universal Life policies provide coverage for the lifetime of the insured and typically pay out upon their death as well. These types of policies do not require the death of both insured individuals to trigger a payout, thus distinguishing them from Survivorship policies.