Survivorship Life Insurance
Description
A survivorship life insurance policy covers two individuals, usually a married couple. This type of policy pays benefits only following the second death of the two individuals. The Economic Recovery Tax Act provides that federal estate taxes may be deferred until after the second death. Survivorship life was designed to take advantage of this provision.
Objective
To provide funds sufficient to cover the costs of settling an estate.
Suitability
Suited for married couples with a significant combined estate value, especially with illiquid assets such as a business or real estate.
Product Features
- More Attractively Priced - Survivorship life insurance is usually more financially attractive than liquidating assets or borrowing to pay estate settlement costs.
- Availability of Funds - Proceeds are available at the exact time needed, at the second death.
- Cost Advantage - Survivorship life insurance is much less costly than individual policies.
- Tax Advantages - Proceeds can pass estate tax free to heirs.
- Proceed Limits - No proceeds are payable at first death.
- Illiquid - Survivorship life is a long-term product and has little liquidity in early years.
- Variable Costs - Minimum costs depend on insurability.
For more information, please contact your local financial advisor.
