Insurance Quote Second to Die
Second to die life insurance, or joint life insurance, is very similar to universal, with the exception being that this coverage covers two people rather than just one. As a result of this different feature, there is no benefit paid out of a 2nd to die policy until both individuals on the policy have passed away. This type is used primarily to help protect the couple’s assets after death and are typically less expensive to maintain than two separate policies.
Who Needs a Second To Die Policy?
Many couples are well-established enough that they do not feel the need to have a policy in order to provide for their spouse when passing. After building up a nest egg and after both people are retired, for example, the death of one spouse may not have a significant impact on the overall amount of money that the remaining spouse has to live on. In this situation, it is not necessary to purchase a policy that will pay out to the remaining spouse.
With a last to die insurance policy, the focus is not on protecting the remaining spouse. Rather, it is on making sure the family estate remains preserved for the couple’s heirs.
Typically, the federal state taxes enforced after the first spouse passes away are not that steep. After the remaining spouse passes away, however, these taxes can be quite significant. As a result, the estate of the couple can actually be in danger. With a last survivor policy, any tax liability associated with the estate is covered.
What is Protected by Survivorship Insurance?
Second to die coverage can help protect any form of family estate. This includes property, real estate, family farms, and any other form of hard assets. Since estate taxes are based on the total current asset value, having this insurance in place can help prevent the danger of liquidation. In addition, this type of insurance is most often used by those with larger estates that are valued at $2 million or more.
In order to guarantee that the joint insurance coverage is able to pay for estate taxes, the individuals covered by the policy must set it up so the proceeds of the life insurance coverage can be removed through gifting or by placing the policy in a trust, in the name of the children, or in some other form of third party ownership. To make absolutely certain the policy provides the proper protection, it is generally necessary to consult with both legal and tax professionals when drafting the policy.
Other Uses for Survivorship Insurance Coverage
In addition to protecting estates, parents of special needs children may also be interested in a second to die coverage. Since a special needs child may dependent upon his or her parents for an entire lifetime, the loss of both parents is a particularly difficult situation. With a survivor insurance policy, funds are guaranteed to be there for the child to assist in his or her care. There are other forms of insurance that parents of special needs children may wish to use along with 2 nd to die insurance in order to be certain their children will be properly cared for after they are gone.