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Survivorship life insurance is an excellent way to manage your estate planning or one of the good tools to help manage your estate. If you haven’t heard of survivorship life insurance you may be more familiar with it by some other names:

• Joint and Survivor Insurance
• Second to Die Life Insurance

This policy by whatever name is something that is to insure the lives of two people which are almost always a husband and a wife though that’s not a necessary factor.

How It Works

With this policy the death benefit is actually not paid out to the beneficiary until after the second insured dies. You can find this type of life insurance policy almost always as either a whole life or a universal life policy.

By going with the survivorship, or second to die, policy it’s going to be more affordable in almost all instances than having two separate life insurance policies.

The life insurance policy will not pay until the second person dies and the reason for that is that this type of life insurance policy is one that is designed to either pay for or assist with the paying of the estates taxes. Estate taxes are something that can be deferred until both of the insured’s die so that lead to the creation of this special type of life insurance policy.

These policies are those that are used especially by wealthy individuals used as a tool in their estate planning. It removes the proceeds of the life insurance policy by the use of both gifting and then placing the policy in the ownership of a third party.

The third party placement is usually going to be placed in a trust or in the name of their children. Carefully plan with both your tax and legal counsel and through careful construction of your policy you’ll be able to keep the net worth preserved for those that you leave behind.