What type of life insurance is often utilized to ensure a financial benefit after the second insured individual passes away?

The Last Survivor Policy, also known as a second-to-die policy, is specifically designed to provide a death benefit after the death of the second insured person. This type of policy is particularly advantageous for couples or business partners who want to ensure that their beneficiaries receive a financial benefit only after both individuals have passed away.

The mechanics of a Last Survivor Policy allow it to be a cost-effective solution as it typically has lower premiums compared to two separate individual life policies, given that the risk of payout is deferred until both insureds are deceased. This can be particularly useful for estate planning purposes, as it can help cover estate taxes or provide an inheritance to heirs.

The other types of insurance listed do not specifically cater to the scenario of providing a benefit after the second insured person dies. Term life insurance provides coverage for a specified period, whole life insurance offers coverage for the entire lifetime of an individual but is focused on the death of the insured individual, and universal life insurance has flexible premiums and death benefits but is still centered around individual policyholders rather than a second-to-die benefit structure. This distinguishes the Last Survivor Policy as the most suitable choice for the situation described.