Considering Survivorship Life Insurance

Although many clients can have their financial protection needs met by individual life insurance policies, there are some who could benefit by adding a survivorship policy to their overall planning scenario.

Survivorship life insurance policies are a type of policy that insure the lives of two people. Typically, the two insureds are a husband and wife. Survivorship life insurance is known by a variety of different names, including joint and survivor life insurance and second to die life insurance.

A primary purpose of survivorship life insurance is that it is designed to help in paying estate taxes. In these types of policies, two insureds actually share just one death benefit. In fact, there are no benefits paid out from the policy when the first insured dies.

Therefore, the death benefit from the policy does not pay out to the beneficiary until the second insured passes away. Survivorship life insurance policies are typically sold as permanent life insurance – usually either as whole life, or as universal life.

 

The Benefits of Using Survivorship Life Insurance

There are many benefits to owning survivorship life insurance. Because of the marital deduction with regard to estate taxes, the payment of these taxes can typically be delayed until the second spouse in a married couple passes away.

So, in the case of survivorship life, the death benefit – paid only upon the death of the second spouse – will be available to help pay all or a portion of the estate taxes that are due at that time.

Survivorship life insurance is also sometimes thought to be easier to purchase than an individual life insurance policy. This is because, since both of the spouses must pass away before the policy pays out, the insurance company has less of a concern if one or the other spouse may have health issues.

These types of policies are also – in most cases – less costly to purchase per thousand dollars of coverage than individual life insurance policies. This is due to the fact that survivorship life insurance is priced based upon the joint life expectancy of both of the insured individuals. With that in mind, because the insurance company pays no death benefit until both insureds have passed away, the premium for a survivorship life policy will oftentimes be less than two individual policies.

Survivorship life policies also have a place in helping to protect families with a special needs child. For instance, the parents of a child with special needs can use survivorship life insurance to help provide for that child, even after both parents have passed away.

 

Offering Survivorship Life Insurance to Those Who Need It

While there are several key benefits to owning a survivorship life insurance policy, it can be time consuming to find good, quality prospects for this (or any) type of coverage. This is where we can help.

If you would like to ensure that you have a full pipeline of leads for life insurance – and in turn, earn thousands of additional commission dollars each and every month – then contact us toll-free at 1-800-643-6143 now.

 

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Brian J. Kay, Executive Director, Leads4Insurance
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