Survivorship Life Insurance
Quick Facts
Survivorship life insurance policies cover spouses or domestic partners
This type of joint life insurance only pays out when both parties die
Survivorship life insurance allows couples to avoid estate taxes and provide care for family members requiring permanent care
Survivorship, or second-to-die life insurance, is coverage that allows two parties on the policy and only pays the benefit when both insured pass away. While survivorship life insurance benefits couples with specific financial needs, there are many factors to consider before buying a policy.
Keep reading to learn if survivorship life insurance is right for you and how to find the cheapest rates.
Understanding Survivorship Life Insurance
Couples looking for a permanent life insurance option may consider survivorship insurance. This is one of two types of life insurance that allows spouses or those in a domestic partnership to be on the same policy. However, survivorship life insurance only pays benefits once both parties die.
This table shows the different types of survivorship insurance policies available.
Survivorship Life Insurance Policy Types
Type of PolicyDescription
Traditional Survivorship Life InsuranceA type of permanent life insurance that pays out a death benefit only when both insured individuals have died.
Variable Survivorship Life InsuranceA type of permanent life insurance that provides death benefits and investment options.
Guaranteed Universal Survivorship Life InsuranceA type of permanent life insurance that provides a guaranteed death benefit and a cash value component.
While many people choose the traditional policy, guaranteed survivorship life insurance or universal survivorship life insurance may be better for those looking for a cash-value option to increase benefits.
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Pros and Cons of Survivorship Life Insurance
Why should couples have a joint life insurance policy? As with any type of insurance, there are advantages and disadvantages to this form of life insurance for married couples.
Check out this table for the pros and cons of purchasing a survivorship insurance policy.
Survivorship Life Insurance Policies Pros and Cons
ProsCons
Can provide a larger death benefit at a lower cost than buying two individual life insurance policies.The death benefit is paid only after both insured individuals have died.
Can be a valuable tool for estate planning, especially for couples with significant assets.The premiums for survivorship life insurance policies can be more expensive than those for individual life insurance policies.
The underwriting process can be less stringent than for individual life insurance policies.Survivorship life insurance policies may not be suitable for couples who have different life expectancies or health conditions.
The death benefit is paid tax-free to beneficiaries.
A survivorship policy offers life insurance for families that need to pay for continuous care for a family member. In addition, it’s a good option if one person can’t qualify for coverage on their own.
Although it’s not often seen as an option for life insurance for newlyweds, it’s worth considering if you have specific needs that a traditional life insurance policy won’t cover.
Survivorship Life Insurance Coverage Options
Coverage options for survivorship life insurance vary, including the life insurance death benefit. Insurance companies allow couples to personalize coverage to meet their needs. Customization typically occurs through riders and policy add-ons.
Survivorship Life Insurance Riders and Add-ons
Insurance riders and add-ons vary by company but may include:
Estate preservation for tax planning
Premium waivers if income is severely disrupted by death or disability
Extra coverage for each person, which can be converted to whole-life coverage
It’s essential to add riders to your policy to get the correct coverage that meets all of your needs.
Cost of a Survivorship Life Insurance Policy
The cost of a survivorship insurance policy varies significantly by insurer and policyholder. However, purchasing a joint life insurance policy is usually less expensive than two individual policies.
This table shows average survivorship life insurance rates.
Survivorship Life Insurance Rates
AgeMaleFemale
55 – 60$45$40
60 – 65$50$45
65 – 70$55$50
70 – 75$60$55
75+$65$60
Because rates increase with age, starting your policy as early as possible is beneficial.
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How to Know If Survivorship Life Insurance Is Right for You
When looking for life insurance for yourself and your spouse or partner, consider whether a joint or survivorship life insurance policy meets your needs.
Differences between Joint Life and Survivorship Life Insurance
CoverageJoint Life InsuranceSurvivorship Life Insurance
Coverage TypeTwo types: first-to-die and second-to-dieSecond-to-die policy only
Death benefitPaid out to the remaining policyholderPaid out to beneficiaries after both policyholders pass away
BeneficiariesRemaining policyholderBoth policyholders’ beneficiaries
The main difference between a joint and survivorship policy is that a joint policy pays when the first insured passes away, while a survivorship policy pays when both parties die.
A survivorship life insurance policy may be right if you want to leave a large inheritance or if one party is ineligible for life insurance on their own.
In addition, survivorship life insurance may be needed to pay for care if you have a family member that requires ongoing care. Consider the benefit of survivorship coverage when looking for life insurance for children with special needs.
Best Way to Shop for a Survivorship Life Insurance Policy
First, determine your specific needs to get the correct survivorship life insurance. Speak with a financial advisor or attorney for the best advice for your beneficiaries. Then, compare quotes from multiple companies to find the best coverage with the lowest survivorship life insurance rates.
Frequently Asked Questions
What’s the difference between a survivorship life insurance policy and an individual policy?
A survivorship life insurance policy covers a couple and only pays out when both people insured pass away. On the other hand, an individual policy only covers one person and pays out when that person dies.
What happens if both spouses under a survivorship life insurance policy die?
A survivorship life insurance policy only pays out when both parties die, so the benefits would be distributed when both spouses die.
How do you name a survivorship life insurance policy beneficiary?
You may choose anyone you would like to receive your policy’s life insurance death benefit. You may have to provide specific information, such as full name, address, phone number, date of birth, and social security number of the beneficiary.
Why should I get a survivorship life insurance policy?
Survivorship life insurance is an excellent option for people looking for estate planning or who want to leave a significant benefit to the family. For example, high net worth survivorship life insurance helps beneficiaries avoid hefty estate tax penalties.
What are the tax implications of a survivorship life insurance policy?
A survivorship life insurance policy helps avoid estate taxes, which provides more money to your beneficiaries.
Additionally, survivorship flexible premium life insurance allows you to pay more into the policy to increase the cash value. However, adding too much cash value may turn the policy into a modified endowment contract, which increases taxes.
Experts recommend creating an irrevocable life insurance trust (ILIT), ensuring that the policy payout doesn’t incur substantial estate taxes. The ILIT protects the death benefit and allows your beneficiaries to retain the most money.
What are the benefits of a survivorship life insurance policy?
Survivorship life insurance is often cheaper than two policies and may offer coverage to someone who otherwise does not qualify. For example, life insurance for seniors may be more expensive as individual policies and health concerns may disqualify one person. A joint policy allows for cheaper coverage for both people.
What company has the best survivorship life insurance policy?
The best company that provides survivorship insurance offers life income joint survivor settlement option guarantees, which allow beneficiaries to choose how benefits are disbursed. Compare quotes from multiple companies to find the best coverage and affordable survivorship life insurance rates.
What factors impact survivorship life insurance policy rates?
Many factors, including your age, gender, health, and hobbies, such as smoking, impact survivorship insurance rates.
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Rachael Brennan
Licensed Insurance Agent
Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states.
After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in…
Benjamin Carr
Former State Farm Insurance Agent
Benjamin Carr worked as a licensed insurance agent at State Farm and Tennant Special Risk. He sold various lines of coverage and informed his clients about their life, health, property/casualty insurance needs.
Assessing risks and helping people find the best coverage to suit their needs is a passion of his. He appreciates that insurance was designed to protect people, particularly during times…
Former State Farm Insurance Agent
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