Survivorship life insurance covers two people (usually spouses) and pays out only after both have passed away. This type is popular in estate planning:
- Estate Tax Efficiency: Second-to-die policies are often used to help heirs cover estate taxes. Since they pay out only after both insured individuals pass, they offer a large death benefit for lower premiums.
- Funding Special Needs Trusts: This policy type is beneficial for providing for dependent children, including those with special needs, after both parents have passed away.
- Legacy Planning: These policies can also serve as a strategy to leave a legacy or charitable donation, as the payout can be directed to a charity or foundation of your choice.
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