Survivorship Life Insurance

Survivorship Life Insurance, also known as Joint and Survivor Life Insurance or Second to Die Life Insurance, are insurance policies that insure the lives of two people, typically a husband and a wife.

The death benefit is not paid to the beneficiary until the death of the second insured.  These survivorship life insurance policies are generally available as either whole or universal life policies, and often provide more affordable life insurance than two separate policies.

The reason a survivorship life insurance policy doesn’t pay until the second person dies is that it is designed to pay or assist paying for estate taxes. Estate taxes can be delayed until both spouses die thus the design of these special insurance policies.

Survivorship life insurance policies are effective tools often used by wealthy individuals in estate planning. By removing the proceeds of a life insurance policy through the use of gifting and placing policies in third party ownership such as a trust or in the name of children, a joint and survivor policy can be used to pay for estate taxes.