| With recent changes in
inheritance tax laws, many people are worried that their
life insurance
beneficiaries are going to be stuck paying way too
many taxes, and receive no actual money from their policies.
Survivorship life insurance could be a way to get around
inheritance taxes.
Survivorship life insurance is also known as joint and
survivor insurance or second to die life insurance.
Survivorship life insurance
policies insure the lives of two people, usually
a husband and a wife, instead of just one person.
With survivorship life insurance, the death benefit
is not paid to the beneficiary until the death of the
second person insured on the policy. The reason a survivorship
life insurance policy doesn't pay until the second person
dies is that it is designed to pay or assist paying
for estate taxes. Estate taxes can be delayed until
both spouses die.
Joint survivorship life insurance policies are useful
tools often employed by wealthy individuals in estate
planning. By removing the proceeds of a life insurance
policy through the use of gifting and placing policies
in third party ownership such as a trust or in the name
of children, a joint and survivor policy can be used
to pay for expensive estate taxes. Careful planning
by your tax
and legal counsel, coupled with a properly structured
second to die life insurance policy, can help you preserve
your net worth for your heirs.
Second to die life insurance often provides more affordable
life insurance than two separate policies would.
Survivorship life insurance policies are usually available
as either whole or universal life policies.
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