How are Survivorship Life Insurance Policies Helpful in Estate Planning?

  • Clifford M. Cohen,
  •   Estate Planning
  •   Comments Off on How are Survivorship Life Insurance Policies Helpful in Estate Planning?
Survivorship Life Insurance Policies

How are Survivorship Life Insurance Policies Helpful in Estate Planning? 

A survivorship life insurance policy, also known as survivorship insurance, SUL insurance, second-to-die life insurance, joint life insurance, or joint survivor life insurance, will cover two people under a single policy. The policy pays out death benefits only when both people die, which is different from another joint life insurance policy known as first-to-die life insurance that pays out after the first spouse dies, and people who want to pursue this option should speak with a Washington DC estate planning lawyer.


While survivorship life insurance policies have typically been estate planning tools for wealthy couples that are hoping to limit future tax liabilities for their heirs, the same policy can be very useful to other types of families with more modest incomes as well. Because a survivorship life insurance policy can combine two people into one life policy, you could get a far more significant death benefit at a lower cost than you would buying two individual life insurance policies, and death benefits will be paid tax-free to the beneficiaries.

Types and Prices of Survivorship Life Insurance Policies

Survivorship life insurance is usually a form of permanent life insurance that is either a whole life insurance or a universal life insurance policy. Whole life insurance offers guaranteed premiums, cash value, and death benefits, while universal life insurance could have a cash value component allowing people to tap into money while they are still alive. 


Survivorship life insurance policies will typically cost less than buying two separate policies because the risk for the insurer is lower. Whereas two $1 million policies will require an insurer to pay $2 million, a single $1 million policy will only cost half as much.


This can ease your underwriting process because an underwriter focuses more on the younger or healthier person of the two people applying for a policy since that person will be considered the more likely to be the second to die. Joint life expectancy can be longer than individual life expectancy, meaning second-to-die policies are more affordable than first-to-die policies, although actual policy costs will vary depending on several factors, such as the age, lifestyle, and health of the applicants, as well as the specific kind of insurance and the insurance provider. 

Pros and Cons of Survivorship Life Insurance Policies

Just as is the case with any kind of life insurance, survivorship life policies have both advantages and disadvantages. Some of the positive aspects may include:


  • People can get more coverage than they would individually
  • The policy can be less expensive than buying two life insurance policies
  • You could receive certain tax advantages for estate planning purposes
  • You will guarantee an inheritance for your loved ones
  • Policyholders may be able to tap into a policy’s cash value while they are still alive
  • Allows you to guarantee that a loved one or dependant who needs permanent care will get help after you die
  • When you are having trouble qualifying for life insurance because of your age or health, survivorship policies can allow you to get coverage or increase the coverage you are eligible for

The drawbacks to survivorship life insurance might include:


  • A surviving partner will get no death benefit after the first person on the policy dies
  • Divorce may complicate a second-to-die policy
  • Your partner cannot be a beneficiary, so people hoping life insurance will provide for a partner after death need to get separate life insurance policies or a first-to-die joint life policy 

Call Us Today to Schedule a Free Consultation with a Washington DC Estate Planning Lawyer

Are you curious about a survivorship life insurance policy but unsure of exactly what kind of coverage you will need? Get the help of The Law Offices of Clifford M. Cohen in evaluating your entire situation and finding the right kind of policy that will provide all of the benefits you are seeking.

Our firm serves clients of all income levels and helps them get the protection they need for their families. Call (202) 895-2799 or contact us online to receive a free consultation with an estate planning lawyer in DC.