What is the treatment of income from a dual life policy upon the death of one spouse?

In a dual life policy, which covers two individuals (typically spouses), the treatment of income upon the death of one spouse typically involves the surviving spouse receiving the full benefits from the policy. This arrangement is established to ensure that the surviving partner has financial support in the event of the other's death, providing a critical safety net for families.

The dual life policy is often structured to benefit the surviving spouse primarily, reflecting the intent of the policy to provide emotional and financial stability during a difficult time. While tax implications may exist depending on the jurisdiction and specific circumstances of the policy, these taxes do not influence the primary distribution of the benefits, which is aimed to support the surviving spouse fully.

This focus on the surviving spouse receiving the entirety of the income distinguishes dual life policies from other types of insurance arrangements, where distribution among multiple beneficiaries or heirs could occur. In essence, the aim of this policy type is to ensure that the surviving partner is adequately provided for without the complicating factors of splitting benefits among other parties at the time of loss.