A Guide to Survivorship Life Insurance

Survivorship life insurance, (sometimes referred to as a second-to-die policy), is a useful policy that has a few interesting stipulations to it: For this particular policy, the benefits are not paid off until both of the parties that are involved in the policy have actually passed away. In this way, you have a policy that is more like a contract for a trio of people, giving older couples a chance protect their own valuable assets so that heirs can still get what they deserve.

For spouses, survivorship life insurance provides an incredibly popular and logical option. One spouse can die and the other will not have to pay any taxes on the payout of the policy, which means they can keep their assets protected, ultimately protecting them for their beneficiaries.

Survivorship Life and Insurance Providers

If someone happens to be unqualified to receive life coverage individually, survivorship life insurance can provide a means by which a spouse who has a medium or low risk can have insurance with their partner. This way, the company can justify having a policy by relying on one spouse to live longer, and then the company gets to take on more income through premiums throughout the years.

When business partners are so invested in each other, it is also common for these partners to then protect each other by investing in it. Considering that when one partner dies, a small business owner often has to close that joint venture, this way, the surviving partner can avoid those taxes that would otherwise cripple them.

The benefits of Survivorship Life Insurance

If you had to consider the key attraction for prospective buyers of life insurance policies, the thing that draws the most people into buying it is the tax benefits.  If you have a large estate you want protected for your heirs, survivorship is incredibly important, as in the event that these wealthy benefactors do not have an heir, or choose not to leave it to them, the money can go to charity without being taxed.
In the event that either spouse has a child that has special needs, a survivorship policy is an effective means of securing the future of the child after death.

For those Americans continuing to enjoy greater prosperity, there is often a pressure to save and accumulate value. An option such as survivorship life insurance is incredibly popular in this instance. More and more value and money is being allotted to the personal estates of many Americans, and after all the taxes imposed on inheritance money, even with an exemption amount, something like survivorship life insurance is a welcome relief. You can still give your estate to those who need and deserve it without having to pay exceptionally high taxes.

When the IRS knows that an inheritance is coming, they are usually expecting to get a kick back from your money, so it is nice to have an opportunity to stop them from doing that. Many of those people who get to leave a substantial inheritance that’s the result of years of hard work and an entire lifetime’s worth of savings believe that it is something that the heirs deserve, not the IRS. By choosing one of these survivorship policies, they can be comforted in knowing that the wealth they leave will actually go to their children, instead of the IRS and government.

When Applying for Survivorship Life

Remember that companies might not be able to provide the coverage that you’re applying for.  It is a much easier policy to qualify for over some others, but this is no sure thing. You still have to deal with different processes that the company will go through, so that they are able to minimize the risk they have.

Thankfully, for the most part, you should be able to qualify, and that is because the interests of your insurance company are also protected from this investment as well. Since these particular policies are safe, the premiums tend to be lower in price by far, better than policies that are more traditional.

Ultimately, make sure you are talking to professionals about survivorship life insurance, and don’t take one source of information as the definitive. Always look for a second, or even a third opinion.

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