Final answer:
The life insurance policy that usually covers two lives is known as Joint and survivor life insurance. It's designed to pay out after the death of the second insured person, and it is particularly useful for estate planning. Actuarially fair premiums for life insurance would vary depending on factors such as family history of diseases.
Step-by-step explanation:
The life insurance policy that generally covers two lives only is B. Joint and survivor life insurance. This type of policy, often called survivorship or second-to-die insurance, pays out the death benefit after the second person on the policy passes away. It is frequently used by spouses to plan for estate taxes or to provide for heirs because the policy accumulates a cash value and has a death benefit. Cash-value (whole) life insurance is another type of life insurance which combines a death benefit with a savings account component, wherein the cash value accumulates over time and can serve as a financial resource.
Actuarial fairness in premiums is also an important concept in the insurance industry. For example, if 50-year-old men were divided into two groups based on family history of cancer, the actuarially fair premium would be different for each group due to varying risks. Group with family history of cancer would have a higher premium compared to those without because of their higher chances of dying within the next year, illustrating the considerations insurers take into account when determining premiums.