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Survivorship Life Insurance

What is Survivorship Life Insurance?

A type of variable life insurance policy that covers two individuals and pays a benefit to a beneficiary once both clients have died. A survivorship (or second to die life insurance policy) is designed to insure two lives in one policy with one premium payment. The policy only pays a death benefit when the second of the two insured passes away. There is no death benefit paid upon the first death. If there is a need for liquidity at the first death then having one or both of the insured purchase an individual term or permanent policy could make sense as well. For example, if there is a large age gap between the two insureds, such as in a second marriage.


Some Benefits of Survivorship Life Insurance


  • Build tax-deferred cash value —There is a growth in the cash value of the policy and it is deferred from federal taxes and can also be accessed for a variety of personal needs.

  • Flexible premiums — Premiums can be raised or lowered depending on your financial needs/situation at any given time.

  • Affordable — usually is less expensive than two whole life or universal life policies.

  • Tax-free death benefit —Your death-benefit, regardless of how small or large it may be, is passed on to your beneficiaries generally free of income tax.

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