Second-to-Die Life Insurance

“Survivorship” or “second-to-die” permanent life insurance can help heirs “replace” money lost to estate taxes. The life insurance pays when the second spouse dies, typically around the time the estate taxes are due. One concern regarding second-to-die insurance is the uncertainty concerning estate taxes in the future. For example, if the estate tax is eliminated, there is no reason to buy insurance purely to replace assets lost to estate tax.

Second-to-die term insurance may help alleviate concerns about the future of estate taxs. Term insurance has a future expiration date and the premiums may be lower in the beginning. Additioanlly, term insurance typically allows the insured to convert to permanent insurance later on.

See Deirdre Wheatley-Liss, Cheap Dollars to Replace Estate Taxes? Survivorship Term Insurance, New Jersey Estate Planning and Elder Law Blog, Oct. 10, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.