Survivorship Life Insurance Useful For Estate Planning
May 4, 2016 by Farm Forum (Aberdeen, SD)
The last several columns could best be described as an overview of life insurance. We discussed various forms of term and permanent plans along with an incredibly valuable rider to cover possible long term care expenses. I will now wrap up the discussion with an explanation of a style of policy that by design just lends itself to estate planning purposes.
This is survivorship life insurance. As the name would imply, it does not pay its proceeds until the last survivor should pass. As this is typically used in family planning situations, this would be the last spouse. By far, this gives us the most bang for our bucks as we are insuring two lives instead of one. Actuarially, this is a distinct advantage for lower pricing. Another factor to consider is that we have the benefit of the female spouse. Meaning their longevity. Women far outlive us men and this is also positively reflected in lower premiums. What this means out here in the real world is that you can generally purchase about twice as much face amount in a survivorship policy as you could in an individual policy for the same money. This fact becomes vitally important in estate planning scenarios as we typically need large to very large dollar amounts of benefits. This then leads to proportionately high premiums. Affordability and cash flow concerns quickly become apparent and anything we can do to keep these costs down is welcome relief. Click HERE to view the full article. INN news articles may require a subscription to view
