Which policy pays when the second insured dies?

The policy that pays when the second insured dies is known as a Survivorship or Second-to-Die policy. This type of life insurance is specifically designed to provide a death benefit only after both insured individuals have passed away. It is often used in estate planning, where the goal is to ensure that beneficiaries receive a payout only after the last surviving policyholder dies, often to cover estate taxes or to provide financial support to heirs.

In contrast, other types of policies mentioned do not fit this criteria. Joint Life policies pay out upon the first insured's death, Family Income plans are typically designed to provide a regular income benefit to the insured's family for a specified period following the insured's death, and Credit Life insurance is intended to pay off a particular debt upon the death of the insured. Each of these options serves distinct purposes, but they do not provide benefits based on the death of the second insured. Therefore, the Survivorship policy is ideal for scenarios where the financial needs are projected to arise after the passing of both insured individuals.