quick Facts
- Life insurance policies cover spouses or domestic partners
- This type of joint life insurance only pays out when both parties die
- Life insurance allows couples to avoid estate taxes and provide care for family members who need permanent care
Survivorship, or second-class life insurance, is coverage that allows two parties to the policy and only pays the benefit when both insured persons pass away. While life insurance benefits couples with specific financial needs, there are many factors to consider before purchasing an insurance policy.
Keep reading to find out if life insurance is right for you and how to find the cheapest rates.
Understanding life insurance
Couples who are looking for a permanent life insurance option can consider life insurance. This is one of two types of life insurance that allow married couples or those in a domestic partnership to be on the same policy. However, life insurance only pays benefits once both parties die.
This table shows the different types of life insurance policies available.
Types of life insurance policy
| policy type | a description |
|---|---|
| Traditional survival life insurance | A type of permanent life insurance that pays a death benefit only in the event of the death of both the insured persons. |
| Variable survival life insurance | A type of permanent life insurance that provides death benefits and investment options. |
| Life insurance guaranteed to survive | A type of permanent life insurance that provides a guaranteed death benefit and a cash value component. |
While many people opt for a traditional policy, life insurance or universal life insurance may be better for those looking for a cash value option to increase benefits.
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The pros and cons of life insurance
Why should couples have a joint life insurance policy? As with any type of insurance, there are advantages and disadvantages to this form of life insurance for married couples.
Check out this table to learn about the pros and cons of purchasing a life insurance policy.
Pros and cons of life insurance policies
| Positives | cons |
|---|---|
| It can provide a greater death benefit at a lower cost than purchasing two life insurance policies. | The death benefit is paid only after the death of both insured persons. |
| It can be a valuable estate planning tool, especially for couples with large assets. | Life insurance premiums can be more expensive than individual life insurance premiums. |
| The underwriting process can be less stringent than individual life insurance policies. | Life insurance policies may not be suitable for couples who have different life expectancies or health conditions. |
| Death benefits are paid tax free to beneficiaries. |
A survival policy provides life insurance to families who need to pay for the ongoing care of a family member. Plus, it’s a good option if one person doesn’t qualify for coverage on their own.
Although it’s not often seen as a life insurance option for newlyweds, it’s worth considering if you have specific needs that aren’t covered by a traditional life insurance policy.
Life insurance coverage options for survival
Life insurance coverage options are varied, including life insurance death benefit. Insurance companies allow couples to customize coverage to meet their needs. Customization usually happens through policy-specific riders and add-ons.
Commuter Survival Life Insurance Additions
Insurance passengers and extras vary by company but may include:
- Maintain property for tax planning
- Premium waivers if income is severely disrupted by death or disability
- Additional cover per person that can be converted into a lifetime cover
It is essential to add passengers to your policy to get the right coverage that meets all your needs.
The cost of a life insurance policy
The cost of a life insurance policy varies greatly depending on the insurance company and policyholder. However, purchasing a joint life insurance policy is usually less expensive than two individual policies.
This table shows average life insurance rates for life.
Life insurance rates
| age | male | feminine |
|---|---|---|
| 55 – 60 | $45 | $40 |
| 60 – 65 | $50 | $45 |
| 65 – 70 | $55 | $50 |
| 70 – 75 | $60 | $55 |
| 75+ | $65 | $60 |
Since rates increase with age, starting your policy as early as possible is beneficial.
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How do you know if life insurance is right for you?
When you’re looking for life insurance for you and your spouse or partner, consider whether a joint or lifetime insurance policy meets your needs.
Differences between joint life and survival insurance
| coverage | Joint life insurance | life insurance |
|---|---|---|
| coverage type | Two types: the first dies and the second dies | Only second policy |
| Take advantage of the death situation | Payable to the remaining policyholder | It is paid to beneficiaries after the death of the policyholders |
| beneficiaries | remaining document holder | Both beneficiaries are policyholders |
The key difference between a joint policy and a survivorship policy is that a joint policy pays when the first insured dies, whereas a survivorship policy pays when both parties die.
A life insurance policy may be in order if you wish to leave a large inheritance or if one party does not qualify for life insurance on their own.
In addition, life insurance may be required to pay for care if you have a family member who needs ongoing care. Consider the benefit of life insurance coverage when looking for life insurance for children with special needs.
The best way to buy a life insurance policy
First, determine your specific needs for getting the right life insurance. Speak with a financial advisor or attorney to get the best advice for your beneficiaries. Next, compare quotes from multiple companies to find the best coverage with the lowest life insurance rates.
Frequently Asked Questions
What is the difference between a life insurance policy and an individual policy?
A life insurance policy covers both spouses and pays only upon the death of the two insured persons. On the other hand, an individual policy covers only one person and pays out upon the death of that person.
What happens if both spouses die under a life insurance policy?
A life insurance policy is only paid out when both parties die, so the benefits will be distributed when both spouses die.
How do you name the beneficiary of a life insurance policy?
You can choose who you want to receive the death benefit for your life insurance policy. You may have to provide specific information, such as the full name, address, phone number, date of birth, and Social Security number of the beneficiary.
Why should I get a life insurance policy?
Life insurance is an excellent option for people who are looking into estate planning or who want to leave a large beneficence to the family. For example, high net worth life insurance helps beneficiaries avoid heavy estate tax penalties.
What are the tax implications of a life insurance policy?
A life insurance policy helps avoid estate taxes, which saves more money for beneficiaries.
In addition, flexible survival premium life insurance allows you to pay more in the policy to increase your cash value. However, adding too much cash value may turn the policy into a modified endowment contract, which increases taxes.
Experts recommend establishing an Irrevocable Life Insurance Trust (ILIT), which ensures that the policy payout won’t incur significant property taxes. ILIT protects death benefits and allows beneficiaries to keep the most money.
What are the advantages of a life insurance policy?
Life insurance is often cheaper than two policies and may provide coverage for an otherwise ineligible person. For example, life insurance for seniors may be more expensive because individual policies and health concerns may disqualify one person. A joint policy allows for cheaper coverage for both people.
Which company has the best life insurance policy?
The best company offering survival insurance guarantees offer a combined income settlement option for survivors on life, which allows beneficiaries to choose how the benefits are disbursed. Compare quotes from multiple companies to find the best affordable survival insurance coverage and rates.
What factors affect life insurance policy rates?
Many factors, including your age, gender, health, and hobbies, such as smoking, affect life insurance rates.
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Benjamin Carr
Former state farm insurance agent
Benjamin Carr has worked as a licensed insurance agent at State Farm and Tennant Special Risk. He sold various lines of coverage and advised his clients about their life, health, and property/accident insurance needs. Assessing risk and helping people find the best coverage for their needs is his passion. He appreciates that insurance is designed to protect people, especially in times of…
Former state farm insurance agent
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