Second-to-Die Life Insurance

We all know that life insurance is a great investment. It helps with issues over money after we die. Our beneficiaries will usually get a pay out after we have deceased which should help them with the future. There is a type of life insurance that is only paid out after two people have passed away. This is an ideal type of life insurance for a married couple and estate planning once they have passed. It is called second-to-die life insurance.

Second-to-die life insurance is just how it sounds. Once one spouse dies, the remaining spouse does not inherit any death benefits. The policy is still in effect until that spouse dies and then the death benefits are disbursed amongst the said beneficiaries. This type of policy ensures two separate lives covered under one life insurance policy. It is a permanent policy. As said before, this particular type of life insurance is used for estate planning and is designed to cover estate tax liability.

If the total amount of your estate exceeds $1 million, then second-to-die life insurance is going to be your best option. Even those whose estate is made up of tangible assets and real estate would benefit from this policy type. With this life insurance plan your estate taxes would not be due until the remaining spouse has died. In addition, with this policy, you can rest assured that your death benefits will go to who was named as a beneficiary and not be liquidated to cover other expenses or probate costs.

Second-to-die life insurance is also referred to as Survivorship Life Insurance. Qualifying for this type of life insurance becomes even simpler when one of the two parties is uninsured. When purchasing this policy you must consider a few things. First, you must know how much coverage that you will need or perhaps a ballpark figure. The owner of the policy must be stated and which type of life insurance, like whole or universal that you need. The beneficiaries must also be named on the policy. The policy that you choose should be from a highly rated company and will allow for the face amount to be adjusted as estate values change.

Second-to-die life insurance is similar to Universal Life Insurance. The only difference is that second-to-die insurance covers two people under one policy. There may be a minimal size requirement on second-to-die life insurance. It could be as high as $250,000 to obtain one of the policies. These policies are available to all ages, starting from the age of 20 and up to 80. Being married is the ultimate pairing when it comes to this type of life insurance. This would be the best for the arrangement. With second-to-die life insurance, your estate is covered and guaranteed issue to the appropriate beneficiary upon the death of the surviving spouse. Estate taxes are not a concern at the time of death for the first spouse and with this life insurance policy, your family is not left to foot the bill of the estate with liquidation.

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