Jack and Cynthia own a joint life unit-linked investment bond. If Jack dies, what happens to ownership of the bond?

• A. Jack's 50% share of the bond goes to his estate.
• B. Cynthia now owns all of the bond.
• C. Full ownership of the bond passes to Jack's estate.
• D. Jack's 50% share of the bond is automatically encashed and paid to Cynthia, after exit tax.

Answer: (B)

In joint ownership with survivorship, ownership passes to the surviving owner when one holder dies. A joint life unit-linked investment bond is owned by two people as a single policy, so the death of one owner doesn’t cause the share to go to the deceased’s estate or to be cashed out automatically. Instead, the surviving owner automatically becomes the sole owner and continues with the investment under their ownership.

So, when Jack dies, Cynthia becomes the sole owner of the bond. This reflects the survivorship arrangement: the policy remains in force under Cynthia’s ownership, rather than the investment or ownership passing to Jack’s estate or being automatically encashed.