Final answer:
The settlement described is known as a joint life with last survivor benefit in a life insurance policy, where proceeds are received jointly by a couple until one dies, then the survivor receives benefits for a specified period.
Step-by-step explanation:
The settlement in question is known as a joint life with last survivor benefit option in a life insurance policy. This type of settlement allows a couple to receive the proceeds of a life insurance policy jointly, until the first one passes away. After the first death, the surviving member continues to receive benefits for a specified period. Such policies typically have a death benefit and might also include a cash value component that can accumulate over time, acting as a financial account that the policyholder may use during their lifetime.
The death benefit plays a crucial role when policyholders die, as well as in other situations like when medical expenses are incurred, a car is damaged, stolen, or causes damage to others, or a dwelling is damaged or burglarized. If a person dies intestate, meaning without a will, state laws will dictate the distribution of their assets. Life insurance proceeds typically transfer directly to the named beneficiaries, bypassing the probate process that applies to intestate situations.