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    Survivorship Coverage- Information about Second to Die Insurance

    By Walter Moore|30th Sep 2017
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    Second to die offers a life insurance policy on a permanent basis to ensure the lives of two people, typically husbands and wives under a single policy. This type of insurance is also referred to as dual life or survivorship insurance. It provides benefits to heirs upon the death of the second or last surviving spouse. Survivorship insurance enables parents to focus on their children. It is usually used for supporting surviving children, charitable donations, and estate planning.

    Buying Second to Die Insurance

    • Second to die insurance is often purchased by couples with large estates that result in major estate tax responsibilities. Since the policies tend to be less costly than individual, separate life insurance policies, they serve as worthwhile investments to facilitate the receipt of death benefits that are tax-free.

    • If a couple’s estate is worth a substantial amount, it makes economic sense to invest in a second to die insurance policy.

    • It is important to note that this life insurance policy is not limited to husbands and wives. Business partners, parents, and children, as well as siblings, can purchase the policy in pairs.

    • Second to die insurance is also a good way to finance your plans for charity.

    Advantages of Second to Die Insurance

    Second to die policies  make it possible to ensure two lives with one permanent policy at a lower cost than two separate policies. Rates are usually lower in comparison to the same type of policy for two individuals. Cash value is not typically built by the policy and the benefit is not paid until the insured people die.

    • In order for the value of a business or estate to be preserved, capital is secured after the second death occurs. Parents whose children have special needs can rest assured that special caregiving costs will be met after they have both passed on.

    • Generations can preserve the success that they have worked hard for by passing it on to the next generation.

    • Some insurers offer term insurance policies with the option of a second to die insurance. Underwriters use a more lenient mortality table for the policy since it is based on two people’s lives rather than one. If one person is not usually insurable and the other is in good health, you may still be able to get a policy.

    Tax Benefits

    • When the second person dies, beneficiaries have options that include liquidating part of the estate’s assets and borrowing by using the estate value as collateral.

    • Taking the step to purchase a second to die insurance policy when spouses are alive gives beneficiaries a viable solution. They will be able to pay administrative costs and federal estate taxes with the proceeds of the policy.

    • The second to die policy is an effective way to deal with estate tax issues among surviving parties. It eases the burden and allows the surviving person to be less concerned about paying taxes.

    Charitable Donations

    People are passionate about various charitable causes and have special interests in churches, schools, foundations, hospitals animal parks and other charities. Couples who are inclined to charitable giving can efficiently use second to die insurance as an affordable way to boost the effectiveness of their contributions without becoming more financially vulnerable during their lifetime. 

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