Survivorship Life Insurance - What Are Its Uses?
Survivorship Life Insurance - What Are Its Uses
?The primary purpose of just about any type of life insurance policy is to provide for the beneficiaries of the policyholder once they have passed away. Whether the money is intended to be used to help the surviving members of the policyholder's family continue to live standard they have become accustomed to or to cover the debts left behind by the insured individual, each person must decide who and how much money they intend to leave behind order to choose the right policy. In some cases, life insurance can also be used as an investment tool to help provide extra funds for an individual once he or she reaches retirement.
There are also life policies that are designed to serve specific functions beyond simply leaving something behind for a person's loved ones. In the case of survivorship life policy, for example, the policy is designed with estate taxes specifically in mind. This is a type of insurance is often purchased by wealthier couples in order to cover any estate taxes that may be due at the time of the final spouse's passing. This type of insurance is also referred to as second to die insurance since it does not pay out anything until both members of the couple have died.
One of the benefits that come from survivorship life coverage is that it is often much more affordable to purchase a single policy that covers two people rather than buying two separate policies. Since both parties that are uninsured must pass away before this policy pays, it is often recommended that a second life insurance policy be purchased if there is any concern about the remaining spouse's ability to make ends meet. Wealthy couples that do not need to be concerned about paying the bills after one spouse dies may find that survivorship life insurance is all that they really need.
Survivorship life insurance can also be used to provide care for children with special needs. Couples that have children who are unable to care for themselves because of lifelong needs may be interested in purchasing a survivorship life insurance policy since it can be left in a separate trust and maintained by an individual other than the child in order to ensure that the child receives continuous care after the death of his or her parents. Using a survivorship policy in this way will require the couple to meet with either an insurance consultant or an estate planner in order to determine how best put the policy in action.
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