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Many agency quoting sites claim they will provide you with instant survivorship life insurance quotes but after you fill out their form, you only find out there are no quotes and an agent will call you. Should you trust a website that offers instant survivorship life insurance quotes? Probably not. This is a specialized type of insurance policy used for estate planning purposes. You cannot screw this up and should consult the services of an expert, not a generic website.
Whether you’re looking to preserve your estate, make sure your assets are passed down to your heirs or safeguard funds for a special needs child, Survivorship Life insurance is essential in any estate planning process.
Understanding Survivorship Life In Estate Planning
Survivorship life insurance is more than just an insurance policy. It’s a valuable estate planning tool that allows you to leave a lasting legacy to your heirs. Survivorship life also known as second-to-die life insurance, joint life insurance, joint survivor insurance or duel life insurance is very different from a traditional life policy in that it insures the lives of two people (typically a married couple) under one single policy.
“Quick Tip! Get a free 2nd to die life insurance quote by calling: 914-633-1717”
Estate planning experts often recommend a duel life policy instead of an individual policy because it pays a death benefit on the last surviving spouse. Along with being a vital estate planning tool, second to die life insurance offers financial protection to:
- Keep the IRS from taking 50% or more of your wealth
- Protect the financial interests in a business
- Provide an inheritance to heirs
- Establish a legacy
- Fund a special needs trust
- Donate to your favorite charity or other non-profit organization
Why Would Anyone Need Survivorship Life?
1. Estate Tax Funding Through Life Insurance
Federal estate tax rates can be a sizeable percentage of an estate and must be paid in cash to the IRS within nine months of your death. Unfortunately, when a person with a large net worth passes away, personal assets are often used to cover taxes that are due.
Assets such as an IRA’s, stock portfolios or real estate are not easily liquidated and many times these assets are sold at a loss or incur substantial tax penalties. Proceeds from a life policy are typically received income tax-free and could be used by your heirs to pay off estate taxes while preserving assets.
2. Preserving A Family Business
Most family businesses are built with sweat equity and very hard work. If you want your son, daughter or grandchildren to inherit your business after you die you need liquidity to pay the taxes that will be due passing an asset such as your business down to your heirs.
In many situations, families can use survivorship life insurance to provide liquidity to keep the business operating or “cash out” some of the other heirs while continuing the viability of the business.
3. Pay Final Expenses/Debts
Even if you have created an estate plan, it could be a very long time before funds are distributed to your family. Expenses such as funeral costs, debt, and estate taxes can create a financial burden on your heirs causing them to use their own bank accounts or having to liquidate assets to pay for your financial obligations. Life insurance could immediately pay for these expenses so your heirs won’t have to.
4. Special Needs Planning or Leaving a Legacy
Leaving a legacy to a child with special needs takes special planning. Survivor life insurance can help create a secure future for a child with special needs and give parents peace of mind. The long-term expenses of a child with special needs can be substantial over time. Life insurance planning to a special needs trust when you die can help cover expenses and care while not interfering with Government benefits.
What Type of Survivorship Life Policies are Available?
Survivorship life policies are available in two basic forms: whole life insurance and guaranteed universal life insurance (GUL). Whole life and universal life insurance are very often used in estate planning because they are forms of permanent insurance. As permanent policies, they are designed to last a lifetime and come with guarantees to provide long term value to provide estate liquidity.
The death benefit is guaranteed and the policy can be structured to last until age 100, 110 or with some policies, to age 120.
“Did you know, estate taxes are due to the IRS within 9 months
after the last surviving spouse dies?”
There is a cash value account that grows in value and can protect the policy from lapsing in the event premiums are not paid on time.
More Advantages of Survivorship Life Policies
Lifetime protection: A joint life policy will maintain coverage for the duration of both policyholders as long as they live. Some policies can be placed to age 100 and beyond.
Cost-effective: A joint life insurance policy is cheaper than purchasing two separate policies because it is based on 2 lives and the insurer only has to pay one benefit following the death of the last living survivor.
Flexible Underwriting: A joint life policy is easier to qualify because the policy is underwritten on 2 lives. Even if one person healthy but the other person has serious health issues a policy could be issued because both policyholders must die for a death benefit to be paid.
Some Disadvantages of a Survivorship Life Policy
As with any type of financial product, survivorship life is not for everyone and could create some unforeseen problems:
1. No death benefit is paid upon the first to die. If the remaining insured or spouse needs insurance benefits to help pay off debt, financial obligations or cash to maintain a certain lifestyle, a second to die policy is useless for these needs.
2. Getting a divorce could ruin your policy – and your estate plan: Once a joint life policy is issued, the names of the insureds cannot be changed. In the event of divorce this policy might have to be cancelled and replaced with an individual policy.
How To Get Survivorship Life Insurance Quotes
If you’re concerned about the IRS getting their hands on 50% or more of everything you’ve worked so hard for all your life, then survivorship insurance should be considered. But it’s not easy finding second to die life insurance quotes because many agents do not specialize in these policies.
We are an independent agency and we work with more than 30 life insurance companies. The absolute best way to get the best rates on second to die insurance, is to make sure you are working with an independent life insurance agency – like us – who has access to ALL of the top rated insurance companies that specialize in estate planning products.
Final Thoughts
Please note: Planning your estate or setting up a trust can be very complex. You should not go it alone but find the services of a competent estate planning attorney. We are not trying to offer any type of legal advice or tax advice. You should always consult the services of a tax specialist or an attorney.
We are experts in insurance planning and are available to work with your attorney if you require advice on funding a trust with life insurance. If you need help getting survivorship life quotes, just contact our office during normal business hours.
