"By far, this gives us the most bang for our bucks as we are insuring two lives instead of one." Survivorship Life or Second-to-Die as it is sometimes referred to has been around for many years. Here's a look at how it can help in estate planning.
The Insurance News article, "Survivorship Life Insurance Useful for Estate Planning," talks about a type of policy that really lends itself to estate planning purposes. Survivorship life insurance doesn't pay its proceeds until the last survivor dies—that is, the last spouse.
This is a real advantage for lower pricing. Another benefit to consider is the benefit of the female spouse. Since women far outlive men, this fact is also reflected in lower premiums. This means you can typically buy twice as much face amount in a survivorship policy as you could in an individual policy for the same money, which is important in estate planning scenarios. Typically, we need to have very large dollar amounts when it comes to death benefits, which in turn, means higher premiums. Affordability and cash flow are always major concerns, so this strategy can help to keep these costs down.
You should have a "permanent" plan for survivorship policies. Consider either traditional universal life or equity indexed universal life. Universal life will allow the most benefit per dollar invested. When designed properly, it can provide for sufficiently strong guarantees without any waste by having any excess money in cash value. Be certain to talk with seasoned insurance professionals when considering this type of planning for you and your family.
Also, these policies pay out the much-needed funds exactly when typically required. Once the last spouse passes away, the estate is settled and distributed. This is when money is needed for many reasons.
When the value of providing highly-leveraged, tax-free benefits are considered, many individuals opt for this financial and estate planning tool as an affordable way to leave a large legacy for both their families and their favorite charities.
Survivorship plans can provide families with an affordable and workable solution for many needs as part of a comprehensive estate plan.
Reference: insurancenews.net (May 3, 2016) Survivorship Life Insurance Useful for Estate Planning