Survivorship Life Insurance- 5 Things that Should Be On Your Policy
Survivorship Life Insurance- 5 Things that Should Be On Your Policy
Survivorship life insurance is a great product for people who are significantly wealthy, who own businesses, and who live in dual-earner families where life insurance benefits aren't immediately needed if one person should die. These policies provide coverage after both listed parties die, which is why it is also known as 'second to die' coverage. You can utilize this policy to create liquid assets to handle other expenses and make sure that coverage takes care of whatever you need it to protect. This helps alleviate having to sell property or belongings to create liquid assets after a death, as well.
If you are investing in survivorship life insurance, these are 5 things that you need to look for in your policy:
-Second insured option. This should allow you to choose a spouse, business partner, or even a charity so that your money goes where it needs to upon your death. The first listed person dies, and then the second listed person retains the assets and no death benefits are paid until or unless the second person dies.
-Premiums that are low. Because of the nature of this policy, premiums should never be that expensive. However, the premiums are based on the age of the older insured person, so the younger person might pay a little more than they would expect for their age.
-Ability to create a trust to disperse the life insurance benefits after a death. If you can create a trust, you can use this type of policy to fund your business so that it doesn't have to be sold, give money to charity, or leave a legacy for your children that will give them a financially sound future.
-Terms and conditions of the policy that state exactly what happens when the first insured dies. You have to know exactly how the policy operates and this should be listed somewhere in the policy explanations.
-A divorce rider is also a must-have. So many people like to think positive and assume that nothing will happen, but once a policy is set up, you can't change it. Therefore, having a divorce rider in place just makes good financial sense so that you don't have life insurance with someone that you aren't married to because that could create a lot of problems.
All in all, buying survivorship life insurance is a fairly simple process as long as you make sure that these elements are involved in your policy.
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