Early in life, very few people think of purchasing life insurance because the event of death seems far away. It’s only when people couples start aging that interest in insurance spikes. Well, getting life insurance shouldn’t be tied only to death. One, life insurance, especially second-to-die for couples, can help ease the financial burden that will be placed on the heirs if the couple passes away. It is also a great way to leave money behind for expenses such as tuition. With life insurance, a fund is established for one’s heirs to benefit from when the policyholder(s) passes away. Additionally, life insurance helps with estate taxes. In this piece, we’re going to look at second-to-die life insurance and the benefits that come with it.
Second-to-die life insurance is a policy in which the benefit is doled out when the second policyholder dies. It has a lower premium in comparison to buying two individual policies and the cover is on both of you. Here are additional benefits to the second-to-die policy:
One, after one spouse passes away, the surviving spouse need not worry about covering hefty estate taxes. This is because the law allows for one spouse to leave the other spouse with unlimited assets without federal taxes getting incurred under this insurance policy.
Two, insurance companies mitigate any risk that may be involved when one of the partners has medical issues. This is because, again, the payout will be made when the second death occurs. Additionally, this could mean that the couple might even pay a lower premium even if there is a partner with health issues.
Three, in this policy, it is easy to qualify for coverage than in individual plans. This is a huge advantage, especially where one of the partners suffers from poor health. Insurance companies will not be wary of this because there is one payout involved.
Four, in addition to protecting existing estates from taxes, it can be used in building an estate. This is because the policy is designed to ensure that beneficiaries receive some form of inheritance, regardless of the amount of savings.
Finally, your family won’t be forced to sell the property to cover taxes when you pass away. With this insurance policy, estate taxes will be covered by the death benefit which means no moving out.
Consult with an insurance agent for an in-depth look at the various second-to-die insurance policy options that you can purchase with your spouse.