Survivorship Whole Life
Helping to Protect Your Wealth
Without proper planning, a chunk of your money could go to pay taxes when you pass away. While estate taxes may be inevitable, there are ways to conserve — or at least replace — a portion of your estate. One effective tool is a survivorship life insurance policy.
Will your family have an estate tax problem at your death?
Maybe. Many Americans have sizable estates. The majority aren't limo-riding celebrities. According to Tom Stanley, author of The Millionaire Next Door, most people worth more than $1 million worked hard all their lives, and steadily saved their money. The bottom line: You could be a millionaire — if not already, certainly during your lifetime. That could well mean estate taxes at your death.
Survivorship Life Insurance: One Effective Product
If your estate exceeds the IRS exclusion amount , you may have a tax liability. However, that does not mean your heirs should lose part of your estate.
This is whereNew York Life Survivorship Life Insurance* enters the picture. Also known as second-to-die insurance, this coverage can insure both you and your spouse under one policy, with the proceeds payable after the second death.
Survivorship Life Insurance offers a number of benefits in estate planning:
- Simplicity. Under one arrangement, you may want to establish an irrevocable life insurance trust to purchase the insurance policy, with your heirs as beneficiaries. (This keeps the insurance proceeds out of your estate for tax purposes.) By means of a will, estate assets then pass to the surviving spouse at the first death. At the second death, the insurance death benefit is paid, with the policy proceeds passing directly to the named beneficiaries. They can then use the money to replace assets lost to taxes.
- Price. Since two lives are insured, premiums are generally lower than for two single-life policies.
- No second guessing. There is no need to plan based on who will die first.
- Underwriting is generally more liberal than that for a single life policy, since two lives are insured and the benefit is paid at the death of the second. A proposed insured who may have been denied life insurance coverage by a single life insurance product, may be approved for coverage by a survivorship life insurance product. Keep in mind that not every person who has been declined for coverage for a single-life policy is necessarily eligible for coverage under a survivorship life insurance policy.
Survivorship Life Insurance can meet other needs as well, and is commonly used to benefit:
- Children with special needs. The insurance can provide guaranteed funding for a trust to provide for a child with disabilities after the death of the second parent.
- Charitable gifts. This coverage can help create a living legacy for a favorite charitable organization after both spouses' needs have been provided for.
To discuss your life insurance needs, you can contact a local New York Life agent, simply by clicking here.