Survivorship life insurance, sometimes called joint and survivor life or second to die life insures two or more people and the death benefit is not realized until the last of two or more insured individuals dies. The policy may be either a whole life, term, universal or variable type of policy. Survivorship insurance was specifically designed for estate planning and is the most cost effective means of paying estate taxes.
Its use is typically confined to husband-wife, parent-child, or two related business people, such as business owners or key employees. The policy can be considered a very effective tool, relieving the federal estate tax burden of those couples who will be subject to such tax and have elected to take maximum advantage of the marital deductions, so that although there will not be any federal estate tax due upon the first spouse’s death, there will be tax due at the survivor’s death.
The policy may be owned by any party that could own any of the other traditional types of life insurance policy, including an irrevocable trust.
Estate Planning Life Insurance