subject: Characteristics of Survivorship Life Insurance – What are the Characteristics of Survivorship Life Insurance? [print this page] Characteristics of Survivorship Life Insurance What are the Characteristics of Survivorship Life Insurance?
What are the characteristics of survivorship life insurance? This type of insurance covers more than one person. The policy pays out when the last person dies. This is a common policy offered to married couples. One characteristic of these policies is that offer affordable life insurance if one partner is in better health than the other is. Individual policies can cost considerably more if purchased separately. When the coverage combines on two individuals, the costs are much lower. This is a particularly popular option for older individuals or those in poor health. The insurance company sees less risk in insuring two individuals than a single one.
Another reason it is so popular is it is a handy device for estate planning. Because the policy does not pay out until the second person dies, the policy can handle the costs of estate taxes. Another reason many use these policies is to provide financial support for a special needs child after both parents die. It offers the ability to name any beneficiary as does any other life insurance policy does. This flexibility allows the surviving spouse to go on living life without worrying about covering estate taxes or leaving enough to cover the needs of a dependent.
A critical characteristic of this life insurance is the different options available with these policies. You can find these insurance policies in whole or variable life options. This allows for investment choices that some policies do not offer. The covered couple can choose a policy that fits into their estate planning and insurance needs. Many couples would benefit from the use of this type of policy. However, many do not understand how it works. It is important to look at all options before selecting any policy. You should consult with a tax and estate-planning professional before selecting the particular policy.
A final characteristic to consider is the simplicity. There is no need to manage two separate policies. The couple has coverage no matter who passes first. The surviving spouse can continue living without worrying about putting coverage into place for him or herself. They can designate any person or organization as the beneficiary. They can include this type of insurance into their overall estate planning without worrying about major changes when the first spouse passes away. Look carefully before you select any policy for your estate planning. It will be time well spent and will pay off in the end.
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