What defines a survivorship policy?

A survivorship policy is specifically designed to pay out a benefit upon the death of the last surviving insured individual. This type of policy is often used in estate planning and can be an effective way for couples or business partners to ensure a sizable benefit is available to their beneficiaries only after both have passed away.

This approach makes survivorship policies distinct from other life insurance products that might provide benefits at the time of the first individual's death, which is a common feature of traditional individual or first-to-die life insurance policies. The provision regarding the timing of the maturity emphasizes how survivorship policies can help facilitate wealth transfer or provide financial support for dependents in a specific and delayed manner, aligning with the intent of ensuring that a death benefit is available only after the passing of both insured lives.

Therefore, the defining characteristic of a survivorship policy is its maturation upon the death of the last surviving insured, providing clarity to its purpose in financial planning and asset management strategies.