Last survivor life insurance is a type of joint whole life insurance coverage. It is generally issued to couples and pays out after the named person on the policy dies. One of the biggest advantages of a last survivor life insurance policy is that it has lower expenses than carrying individual policies on each partner. It is important to weigh the advantages and disadvantages, as they can mean everything to a surviving partner.
A last survivor insurance policy is typically a single payout policy, so the economic gains are much lower and the costs for the insurance company as well. Such a policy is also a consideration for couples where one partner may have known health issues, as the health of partners will be a determining factor in the risk for the insurance company. The first partner to pass away has little bearing on the policy at all, as long as the premiums are maintained through the remainder of the policy.
The biggest drawback to a last survivor policy is that there is no intermediate payout. Funeral and related expenses for the deceased must be paid from other sources, and that could lead to a financial liability for the surviving spouse. This should be a key consideration when couples are contemplating a last survivor life insurance policy. If finances are expected to be an issue for either surviving spouse, then a different type of policy might be in order, even though it would be somewhat more expensive to take out.