What occurs in a "joint and survivor" policy upon the death of the last annuitant?

In a "joint and survivor" policy, the arrangement is specifically designed to continue making payments until the death of the second annuitant. This type of policy ensures that one annuitant receives payments as long as they are alive, and then the payments will transition to the survivor after the first annuitant passes away. Once the last annuitant dies, the income stream ceases in terms of annuity payouts, but the key aspect of this arrangement is that payments are made throughout both lives involved in the contract.

Therefore, option B is correct because it encapsulates the essence of this policy: payments are sustained for as long as either of the annuitants is alive, and only then do they stop after the passing of the last annuitant. This design serves to provide a sense of financial security for both parties involved.

Other options do not reflect the true nature of how benefits are delivered under a joint and survivor policy. For instance, stating that benefits end without payout or that all premiums are refunded does not align with the foundational principles of this type of financial arrangement. The emphasis on continuing payments until both annuitants have passed underscores the policy's primary intent.