What is typically the effect of a 'survivorship' life insurance policy?

A survivorship life insurance policy is designed to provide benefits only after the death of the last insured individual. This type of policy often insures two or more people, typically spouses, allowing for the payout of the death benefit upon the passing of the survivor. This feature makes it particularly useful for estate planning purposes, as it can help cover estate taxes or provide financial support for beneficiaries after both insured individuals have passed away.

The focus of this policy is to provide a larger death benefit that will not be paid out until both insured individuals have died, which is why option B accurately describes the effect of a survivorship life insurance policy. This characteristic distinguishes it from other types of policies that may pay out benefits upon the death of the first insured or that serve different financial purposes.