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Second to Die Life Insurance Policies
By Ivon T. Hughes
A second-to-die life insurance policy, or survivorship life
as it's sometimes called, insures two lives - a husband
and wife usually or business partners. However, the
death benefit isn't paid out until the second insured
person dies.
Usually, the death benefit from a second-to-die life
insurance policy is intended to go to the children , a
charity or pay taxes owed after both spouses pass away.
In the U.S. there is a marital deduction permitting you to
leave an unlimited amount of assets to your surviving
spouse with no taxes payable at your death. Those
assets then become part of the estate of the spouse and
if it includes a second to die life insurance polciy it could
help pay any taxes. In Canada, there is more lenient tax
treatment.
There are also tax ramifications for small businesses,
which is why business partners also purchase second-to-
die policies.
THE REASON TO BUY SECOND TO DIE LIFE INSURANCE
POLICIES
With a second-to-die life insurance policy your
beneficiaries can pay debts with the proceeds of your
policy, so they won't be forced to sell your house or
liquidate assets to pay the bill.
A second-to-die life insurance policy can help to construct
a financial plan reducing the tax burden of wealthy
individuals by creating trusts and using second-to-die life
insurance as part of the estate-planning process.
ADVANTAGES TO SECOND TO DIE LIFE INSURANCE
POLICIES
1. Less expensive. Second-to-die life insurance is usually
less expensive than life insurance but depends on the
blend of the ages. The premium is based upon the joint
life expectancy.
2. Estate Preservation. A second-to-die policy appeals to
individuals who feel strongly about preserving their
estates with the life insurance paying the taxes.
3. Easier to buy. It's easier to qualify for a second-to-die
policy than for individual life insurance. Since both
insureds must die before the benefit is payable, the
insurance company is less concerned that one of them
might not be in good health.
* Builds your estate. In some cases, second-to-die life
insurance is marketed as a way to build an estate, not
just insulate it from taxes. Much like individual life
insurance, the death benefit of a second-to-die policy can
ensure that certain people receive money, even if you
spend every nickel.
4. Second-to-die life insurance might make sense for
people who don't have a lot of money but want to leave
an estate for their children.
About the Author
Ivon T. Hughes of The Hughes Trustco Group is a licensed Insurance Broker. Author of The Life Insurance Handbook. Get a FREE Copy TODAY!
Email: info@trustco.ca Web: http://www.hughestrustco.com
Article Source: http://www.simplysearch4it.com/article/10954.html
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