Determining if You Need Second to Die Life Insurance
Second to die life insurance is a special type of life insurance that doesn't kick in until the second of two co-owners on the policy passes away.
For example, you're a retired couple, and you and your wife are relatively financially secure and have enough income through Social Security to pay your bills. You want life insurance, but you only want to provide for your children and grandchildren only after the two of you pass away. A second to die life insurance policy is your ticket.
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Benefits of second to die life insurance
Second to die life insurance has a number of beneficial features. It's a perfect type of plan for older couples who are either retired or about to retire.
- Estate planning. Second to die life insurance a formidable tool in the arsenal of tax planning for your estate. This is because all life insurance benefits are tax-free.
- Affordability. Second to die life insurance comes at a fraction of the cost of most other life insurance policies -- especially when you're an older couple; this is because life insurance companies pass on the reduced risk of the policy to you in the form of rates.
- Special needs planning. Second to die life insurance is not only for seniors. It also is a great way to provide for special needs children should both parents pass away. This type of policy comes at a much lower premium than a typical whole life insurance policy, much like the plans available to seniors.
The Cost of 2nd to Die Life Insurance Policies
The cost of 2nd to die life insurance varies and determinant on many factors. You and your spouse need to acquire a medical exam, a letter from your doctor and participate in an interview. All of these factors help determine your total cost.
Do not worry if one of you has poor health. In general, with a second to die life insurance policy, as long as one of you is healthy, then you will still be able to get coverage. The good news is since there are two people insured on the policy, and they both must be deceased before the policy pays out, the policies are usually not as much money as they would be if only one person is insured.