How does a joint life policy operate in terms of benefits?

In a joint life policy, the way benefits operate is that the policy pays out upon the death of the first insured individual and then terminates. This type of policy is designed specifically for two individuals, commonly spouses or business partners, and is useful for ensuring financial support for the surviving parties after one passes away.

The benefit of this arrangement lies in its simplicity; it provides a single death benefit that is available immediately when one insured person dies, which can help cover expenses or provide support for the survivor. After the payout, the policy ceases to exist, meaning the surviving individual would need to secure new coverage if additional insurance is required in the future.

In contrast, other options suggest scenarios that do not align with the traditional structure of a joint life policy. For instance, a policy that pays benefits upon either insured's death implies ongoing coverage for both individuals, which does not reflect the termination aspect of a joint life policy. Similarly, policies that offer payouts over a set term or provide lifetime coverage regardless of health changes do not accurately capture how joint life policies are designed to function.