Survivorship Life Insurance

Survivorship Life Insurance, also known as Joint and Survivor Insurance or Second to Die Life Insurance, are insurance policies that insure the lives of two people, typically a husband and a wife.

The death benefit is not paid to the beneficiary until the death of the second insured.  These survivorship life insurance policies are generally available as either whole life or universal life policies, and second to die insurance often provides more affordable life insurance than two separate policies.  Also, an individual who might not be able to qualify for life insurance by themselves because of health issues may qualify with the aid of a healthy spouse.  

The reason that survivorship life policies don’t pay until the second person dies is that it is designed to pay or assist pay estate taxes, and leave an inheritance to the heirs. 

Survivorship Life Insurance instead of Long Term Care?

If you are considering purchasing long term care insurance to protect your wealth for your heirs, there may be another way.  Long term care insurance can be very expensive, and is something we all hope we don’t have to use.  The idea with long term care insurance is that it will pay for the expense of care, and your assets will not be touched.  But the question that should be asked is, what are we saving those assets for?

What if you could guarantee the amount of those assets without paying for expensive long term care insurance?  Survivorship Life insurance can be purchased with a face amount equal to your assets, payable to your heirs at the time of the second person’s death.  One of two scenarios will happen:

• One or both of you go into a nursing home:
  This is the worst case scenario where your assets are used to pay for your care.  When the second person dies, your heirs receive the death benefit of your life insurance policy.  You received your care, and passed along wealth. 
• Neither of you go into a nursing home:
  Your heirs will receive your assets because you haven’t spent them on care. They will also receive the death benefit of your life insurance on the second person’s death.  Now, you have doubled the inheritance that you passed down.  Also, you didn’t waste money on long term care insurance that you never used.   
  

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