Wednesday, June 13, 2012

Second to Die, Survivor Insurance, Survivorship Life - A Great Way to Leverage Lower Premium Payments

More and more people are asking about what is called second to die, survivorship insurance or survivorship life. This is a life insurance contract or policy on two lives, that pays the death benefit after the death of the second insured. The two insured parties must have reasonable financial ties (most commonly husband and wife).

These policies are excellent estate planning, preservation and creation tools because the cost of insurance is much lower than a policy on just one life.  Also, if one spouse has had some health concerns they can still usually be one the insureds on the second to die policy. Many families that take out second to die policies are trying to leverage the smaller life insurance payments into larger payouts. This is a great way for parents to leave children an inheritance, cover lawyer & estate fees, and pay estate taxes. I have also seen second to die for charitable contributions with life insurance. Husbands and wives that have a strong tie with a charitable cause can again leverage their smaller payments into a much larger death benefit, and even be able to deduct premium payments from their taxes. (If set up correctly. See our page on Charitable Contributions with Life Insurance.)

To sum up and give you an idea of the power of a second to die strategy, please see below:

A 55 year old non smoking man at standard non tobacco rates can purchase a $250,000 Guaranteed to Age 100 Universal Life Insurance policy for $3,800 annually.

A 55 year old man and  55 year old woman (married couple) at standard non tobacco rates can purchase a Guaranteed to age 100 Universal Life policy with a death benefit of $453,000 payable at the death of the second to die for the same $3,800 annually. (As you can see almost double the death benefit for the same premium!)

Please see our website for more information on Universal Life Insurance. I will be happy to email anyone a free quote on Second to Die, Survivorship Insurance, Survivorship life or any other form of life insurance free of charge and with no sales pressure. If you wish Contact Us here.

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