Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by Benji Carr
Former Licensed Life Insurance Agent Benji Carr

UPDATED: Apr 7, 2022

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The Facts of Life

  • Second to die life insurance covers two people, usually married, until death
  • Second to die life insurance policies are lower cost than purchasing two individual life insurance policies
  • Death benefits can be used to offset estate settlement costs, so that your legacy remains intact for the next generation.

Nobody likes thinking about how their death will impact loved ones. We do what we can to ensure our spouses and loved ones can easily navigate our final wishes and move on with their lives with little to no burden. One way to ensure this outcome is to select the right life insurance policy for you and your spouse. Second to die life insurance can be a saving grace if you have a large estate that you’d like to protect for future generations.

In this article, we’ll take a look at second to die life insurance, also known as survivorship insurance, and what it can mean for you and your beneficiaries.

What is second to die life insurance?

Second to die life insurance is a type of policy for life insurance that can be taken out on two people (usually married) that provides death benefits only after the last surviving member of the policy dies. This means that the death of one member of the policy will not award death benefits to the last surviving member. Benefits are only paid out to beneficiaries following the death of both policyholders.

Additionally, second to die policies allow you to preserve family wealth as part of your entire estate planning, which may not be beneficial to couples who are not considered affluent. If it’s not money you’re looking to preserve, second to die policies can also be useful when trying to guarantee the care of a child after both parents die.

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How Second to Die Life Insurance Works

In comparison to traditional term life insurance policies, second to die policies allow policyholders to name individuals other than spouses as beneficiaries. Beneficiaries (usually heirs) can then use death benefits, following the death of both policyholder to offset any estate settlement costs. This protects beneficiaries from having to sell assets to cover them.

When one policyholder dies, the other remaining policyholder continues to pay monthly premiums. Second to die life insurance policies are typically purchased to protect the financial health of future generations. To maximize death benefit and protection of the estate, the remaining policyholder does not receive a death benefit. Policy riders can be added in the event you wish final expenses to be covered, with added cost to you.

With a survivorship life insurance policy, can my spouse receive death benefits after my passing?

The short answer is yes.

You can make arrangements for you or your spouse to receive death benefits following the passing of just one policyholder. This can be done by including a living benefit rider with the purchase of your policy. It’s so common that many companies include this particular exception free of charge.

When including a living benefit rider in your plan, a portion of monthly premiums paid is set aside to be invested at the risk of the surviving partner. Another portion of the premium goes toward administrative expenses and the policy’s death benefit. With a living benefit rider, your policy will be considered a security and may be subject to additional fees due to its investment component. It is important to do plenty of research before including riders into your existing survivorship insurance policy.

For extra protection for your spouse and loved ones, another option is purchasing final expense burial insurance. Just as the name implies, final expense insurance can cover funeral costs, and even outstanding debts, following the death of just one policyholder.

How are survivorship life insurance policies helpful in estate planning? 

If you’re hoping to leave your loved ones with something meaningful, such as multi-generational family property or a large sum of money, a second-to-die insurance policy might be a good way of doing that. Other advantages of survivorship life insurance include:

  • Policies are cheaper than purchasing two individual life insurance policies.
  • Policies are customizable with optional riders (add ons) so that you can build a plan into exactly what you want.
  • The cash value can be built with the option to invest part of your premiums.

Survivor policies are helpful when trying to ensure that your legacy is maintained after your passing and are in the best interests of your beneficiaries (most often heirs).

Disadvantages of Survivorship Insurance

When life takes us in unexpected directions, there can be an impact on your survivorship policy payout. Death benefits can be affected due to:

  • Policyholders divorce. Unless the policy is altered appropriately prior to divorce, the company may choose to cancel it.
  • Ongoing costs. Premiums must continue to be paid following the death of just one policyholder.
  • Delayed payout. The payout date may be delayed following the deaths of both policyholders.

How can I tell if survivor insurance is right for my family?

Purchasing life insurance is a personal choice and one that shouldn’t be considered lightly. It’s important to do plenty of research before selecting an insurance company and policy. Below are a few indicators that a second to die policy might be right for you:

Your Partner is Otherwise Uninsurable

Obtaining a survivorship policy is a good way to obtain life insurance for a partner who otherwise does not qualify. This is typically due to illness or pre-existing conditions that may be considered high risk.

You Want Lower Premiums

Since the premium is calculated based on the health and life expectancy of two people, the cost per month is lower. Additionally, nothing is paid out until both policyholders die, which also allows for monthly premiums to be lower than more traditional life insurance options. Of course, paying for one policy is less expensive than paying for two separate life insurance policies.

You or Your Partner Might not Qualify

Only one member of a second to die policy needs to be in good to moderate health to qualify. This makes a second to die policy easier to obtain than two separate single policyholder policies.

You Want to Build Your Estate

In addition to protecting your estate from taxes, a second to die policy can also help build an estate. Similar to traditional life insurance, survivor insurance can help ensure that beneficiaries receive a minimum payout. This applies even in the event policyholder savings have been depleted before death.

You Want to Protect Your Estate

Many families have properties they wish to remain in the family for generations to come. Survivorship insurance will allow beneficiaries to use death benefits to cover taxes, instead of having to sell parts of the estate – property, for example – to cover them.

You Want to Protects Your Children

Second to die policies can also be used to ensure the safety and well-being of children, following the passing of both parents. This is most often the case in families with only children, and few to no surviving family members.

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What a Second to Die Policy Means for You

Estate planning can be a cumbersome and confusing process for loved ones to navigate. A second to die life insurance policy can take the guesswork out of final preparations, including estate planning and child care instructions.

Survivorship policies can also help you and your spouse protect your hard-built legacies, on behalf of your heirs. When purchasing a second to die policy, you can rest assured that your loved ones won’t be forced to part with precious family heirlooms, land, or property in order to cover the cost of taxes on your estate. You’re legacy remains intact, and your loved ones can navigate your final wishes without issue.

Additionally, survivorship policies can be customized with your life insurance company to your satisfaction. With added riders, you can be free to protect the financial well-being of a surviving spouse or the guardianship of a child following the death of both parents. With survivorship insurance, the complication is taken out of estate planning, leaving your loved ones free to make final arrangements easily, and with confidence.