Second death insurance covers two people, usually a married couple, and pays a death benefit only after both have passed away. It is commonly used for estate planning and to pay estate tax, but can also be used to build assets or provide for heirs with special needs. It is available from most life insurance companies and is generally less expensive than individual life insurance policies.
Second death insurance, also known as dual life or survivor insurance, is a type of life insurance that covers two people who are usually, but not always, a married couple. Unlike traditional life insurance, which pays a death benefit to the surviving spouse or other beneficiary after the death of the policyholder, second death insurance does not pay a death benefit until both insureds have passed away. Survivor’s insurance is most commonly used as a way to assist beneficiaries with regard to estate planning and paying estate tax. However, there are other purposes, including building assets and the safety of heirs with special needs. Most insurance companies that specialize in life insurance sell second death insurance, and agents will help make sure potential policyholders buy the right type and amount of coverage, depending on their reasons for buying one. policy.
In general, people who buy second death insurance mean that their policies benefit their heirs. The children of the insured are usually, but not necessarily, the heirs or beneficiaries of the insurance policy. Second death insurance is generally purchased by policyholders for estate planning purposes. In most cases, this means that the beneficiaries will use the death benefit to pay estate tax. Sometimes, however, policyholders will work with their agents to design the policy so that it also helps build their properties.
Although estate planning might be the most common reason to purchase second death insurance, there are additional reasons policyholders purchase coverage. For example, survivor’s insurance is becoming an increasingly popular way for parents of children with special needs to ensure that their children are financially secure and cared for after the death of their parents. In general, parents will also purchase individual life insurance and consider individual disability insurance to provide their children with the most protection possible. It is also common for life insurance policy holders to use their policies for charitable reasons, and this is true for survivors insurance holders as well. For example, policyholders who do not have children or heirs may purchase a dual life insurance policy with the intention of helping support their favorite charity.
People can buy second death insurance from most insurance companies that sell life insurance. This insurance is generally available as variable whole life and universal insurance policies. Because the policy insures two people, it is generally less expensive than a traditional individual life insurance policy. Also, insuring two people can make survivor’s insurance easier to buy because the company might be less concerned about one party’s failing health. Before purchasing survivor’s insurance, potential policyholders should ask their agent how divorce, the death of their heirs, or changes in estate tax laws will affect their policies.
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