Life Insurance Benefits- Gaining Insight into Second to Die

| December 7, 2017

Second to DieSurvivorship or second to die life insurance is a type of insurance that is paid out after both insured parties die. Typically this insurance provides coverage for a husband and wife. Policy death benefits are only paid after both die. It is possible for more than two people to be insured such as key employees and in this case, the policy pays the death benefit upon the last insured’s death.

For some people who may be unfamiliar with what this type of life insurance entails, it may seem slightly contradictory to only pay when both people die. Although this insurance is not a suitable option for everyone, there are circumstances under which second to die insurance provides the best solution to address financial challenges.

Benefitting from Second to Die Policies

Certain people would benefit substantially from a survivorship life insurance policy.

  • If your family’s net worth is high and your heirs will face estate tax or there is a slight prospect of them encountering the estate tax, survivorship insurance is an ideal choice. Second to die life insurance will help to pay estate a tax at a comparatively low cost and offers worthwhile value for people who are concerned about paying estate tax.
  • Along with high net worth and the need to pass on a legacy to heirs, a charity can also benefit from the policy.
  • Some people regard second to die life insurance as an effective way to build wealth due to the relatively low risk and significant rewards.


Second to die life insurance is normally more affordable than insuring two individuals with single separate policies. Since this type of life insurance policy only pays out when both insured individuals die, the insurance company’s risk level is lower and this leads to a less costly premium.

Second to die insurance does not usually cater to a surviving spouse and should not be considered as a tool for this purpose. However, this type of insurance is an attractive prospect for people who aim to pass on their legacy to children.

Easier Qualification

Since two lives are insured rather than just one, the life insurance company faces a lower risk. Besides resulting in a lower cost for the customer, it also eases the underwriting process that determines whether or not you qualify.

Insurance companies typically focus on the healthier or younger of the two individuals being insured. This is highly beneficial to people who may be regarded as uninsurable due to factors such as their medical history because the insurance provider will include them in the coverage.

Estate Stability

If there is a likelihood of your estate being impacted by taxes that will diminish the stability of your estate, survivorship insurance can help. For people with a high net worth investments, business can be taxed when inherited; estate tax may adversely affect the overall value of the estate.

With the uncertainties that are linked to estate tax law, families can use survivorship insurance to mitigate the consequences of estate tax. Being informed about different financial products will make it easier for you to identify the right financial solution.

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Category: Life Insurance

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