Survivorship Life Insurance Washington DC
Reader’s Question:
My agent recommended Survivorship Life Insurance instead when I was asking for two separate policies for me and my wife. Was he doing me a favor?
Gordon
Washington DC
Well, it depends. You might have told your agent to give you something that will give you cheaper cash outlay compared to paying for two separate policies. In any case, there are pros and cons with each.
A Survivorship Life Insurance (which, by the way, is the same as Second to Die Life Insurance or Joint and Survivor Insurance) will cover both you and your wife in one contract. It is called survivorship insurance because death benefits will be paid only upon the death of both the insured.
Instead of having to pay for two separate insurance policies, both having a $500,000 coverage, you can opt to have $1,000,000 coverage on a survivorship life insurance policy. Definitely, you will have lower premiums to pay while getting the same coverage. The drawback only is that you don’t get to claim death benefits (unlike if you have gotten separate policies).
This type of policy is best when one of you is uninsurable. So, let’s say your wife was diagnosed with a condition that won’t be covered by any life insurer. With a survivorship life insurance policy, her state of health will not be questioned as long as one of you is healthy and insurable. Apart from this, survivorship life insurance policies are also designed to pay or help pay estate taxes.
Gordon, I think for the reasons of saving premium payments and estate planning, your insurance agent from Washington DC might have actually given you a favor.
Tags: life insurance, life insurance beneficiary, life insurance coverage, life insurance policy, life insurance premium