Advantages and Disadvantages of Survivorship Life Insurance – A Policy for Spouse with Real Estate
Advantages and Disadvantages of Survivorship Life Insurance A Policy for Spouse with Real Estate
For those who are interested in finding a life insurance policy that will provide their beneficiaries with the greatest sum, it is going to seem that there is no easy answer. To some degree, this is true. There is certainly no one size fits all solution when it comes to life insurance, though there are certain lifestyles that will be better fits for certain kinds of policies. For example, if you are married and you own property, you may want to consider survivorship life insurance. This is a kind of policy in which two spouses are covered. The beneficiaries may not collect on the insurance until both spouses have passed away. As is normally the case in life insurance, there are both advantages and disadvantages to this kind of insurance plan.
The largest advantages of survivorship life insurance go to those who have spouses and who also own property. As a matter of fact, most people who use this relatively uncommon kind of insurance are those who have much money wrapped up in real estate assets. The reason is that this insurance is designed to fit the needs of those who will have to pay estate taxes. Estate taxes are not due until both spouses have passed away. This allows the insurance policy to be incredibly effective for those beneficiaries who will have to cover the taxes after the deaths of both policy holders. The increased sum in the policy will help heirs to pay for the estates left behind.
With this being said, it should be self-evident that survivorship insurance is not a good fit for everyone. This means that if you are not married or do not have a domestic partner, then you will not find much offered by this policy. Likewise, those who tend to purchase this policy are those who have expensive real estate in their possessions and who tend to have a healthy amount of wealth saved up in savings and in other assets. The truth of the matter is that these policies appeal to those in higher income brackets.
If you are not sure if survivorship insurance is best for you, then you may want to sit down with a personal accountant, financial advisor, or financial lawyer who can help you to understand your financial status. You will also want to consult a financial professional when it comes to the design of the insurance policy. These survivorship policies tend to be either whole life policies with fixed rates and premiums or universal policies with variable payments and interests.
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