How does a joint life insurance policy differ from individual life insurance policies?

A joint life insurance policy is specifically designed to insure two or more individuals under a single contract. The primary distinguishing feature of this type of policy is that it pays out a death benefit upon the death of the first insured individual. This characteristic is what sets it apart from individual life insurance policies, which cover only one person at a time, leading to benefits being paid only upon the death of that individual.

The option noting that it pays out upon the first of multiple insureds to die accurately highlights this key aspect of joint life insurance. Such policies are often utilized in situations where two individuals, such as spouses or business partners, want to ensure that there will be a payout to the surviving party, thus providing financial support or resolving any financial obligations resulting from the death.

This setup can be advantageous for those in close financial relationships, eliminating the need for separate policies for each individual. Moreover, since joint policies focus on the first death, they can often be less expensive than purchasing two separate individual policies, contradicting the notion that they would be more expensive. Thus, the answer captures the essence of how joint life insurance differentiates itself from individual policies.