What is a Survivorship Life Insurance Policy?
What is a Survivorship Life Insurance Policy?
You are most likely asking yourself if you’re reading this post, “what is a survivorship life insurance policy?”. We at Lorenzo Law are here to help you answer that exact question. Read on to learn more about this type of life insurance policy and how it may benefit your estate planning process.
How Does Survivorship & Joint Life Insurance Work?
Survivorship life insurance and joint life insurance are types of policies which cover two people on one single policy. It works in the way that it only pays out a death benefit once both policyholders have passed. It’s a great choice for those wanting to leave something for their heirs, reduce premium payment expenses, and an option for those who are married or long-term partners.
Primary Differences Between Survivorship & Joint Life Insurance
First to Die: This type of life insurance policy is the most common type of life policy. This policy pays out a death benefit to the surviving spouse after one policy owner passes away. Income loss and living expenses are typically covered through this type of policy.
Survivorship: Sometimes referred to as “second-to-die”. This type of policy only pays out when both covered individuals have passed away.
Positives & Negatives of Joint Survivorship Life Insurance
There are positives and negatives to a joint survivorship life insurance policy. Let’s go over them.
Positives
Below is a list of positives you’ll find with a joint survivorship life insurance policy:
- Helps Estate Planning
- Creates an Inheritance for Heirs
- Provides Care for Permanent Dependents
- More Affordable Than Two individual Policies
- Easy Qualifications
- Partner Can Choose to Use Cash Value
- Negatives of Joint Survivorship Life Insurance
Below is a list of negatives you’ll find with a joint survivorship policy:
- One Death Benefit
- Partner Cannot Be a Beneficiary
- Difficult to Update With Life Changes
How are Joint Life Insurance Policies Helpful With Estate Planning?
Estate planning can be a complex process. Joint life insurance policies can simplify matters through paying off existing debts, taking care of tax matters, and providing the funds to protect the final iteration of the estate.
Contact Lorenzo Law for Further Guidance On This Matter
If you’re searching for further guidance on survivorship life insurance policies, you’ll find exactly what you’re looking for with Lorenzo Law. We’re experts in estate planning and we want you to know you’re in good hands with our team of experienced professionals who are looking out for you, today, tomorrow, and beyond. Feel free to contact us using the button below and we’ll be sure to respond to your message as soon as possible. We look forward to hearing from you soon.
