Survivorship life insurance policy is a very special kind of life insurance policy as it provides insurance cove to both husband and wife. It is one of the best options for the financial security of your children if both the husband and wife die in sudden circumstances. It is also called second-to-die life insurance as the coverage is paid out only after the death of both the spouses. Like any other insurance policy a survivorship life insurance policy can be a term life insurance policy or a whole life insurance policy. Survivorship life insurance is mostly purchased by wealthy couples to avoid paying their estate taxes until the second spouse dies. There are a number of advantages and disadvantages of a survivorship life insurance policy as stated below:-

Advantages of Survivorship Life Insurance Policy

• These policies are cheaper as compared to the individual life insurance polices as company has to pay the death benefit only once
• It is an easy way to cover a spouse having health complications as combined life expectancy of both the spouses is high
• It can be used as a tool for estate planning
• It is one of the best way to avoid federal estate taxes
• It can be used to defer estate taxes until the death of second life partner
• It helps beneficiaries in financial crises by providing them with liquid cash

Disadvantages of Survivorship Life Insurance Policy

• There is no option of alteration of the policy once it is written
• The premium amounts cannot be changed after signings the policy so you must be careful before finalizing the deal
• Younger life partner will have to pay more as rate of the premium depends upon the average of both the spouses
• In order to execute these policies in a best form you need to establish a trust

You can get the complete information regarding survivorship life insurance options before sealing the deal with any insurance company. Survivorship policies become complicated if there is an occurrence of divorce among the spouses. Insurance company will offer you rider option in the case of divorce. You can use the Internet to get information about survivorship insurance policies in different states of America. For example you can find out cheap Colorado life insurance premiums in terms of survivorship policies by searching the over the Internet

This entry was posted on Wednesday, February 15th, 2012 at 7:09 pm and is filed under Health Insurance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.