Second-to-die insurance

Second-to-die insurance

Insurance policy that, on the death of the spouse dying last, pays a death benefit to the heirs that is designed to cover estate taxes.

Second-to-Die Insurance

An insurance policy that covers a married couple and pays the death benefit on the death of the second spouse. Generally speaking, the death benefit is intended to cover the estate tax. Because the second spouse does not owe the estate tax upon the death of the first spouse, second to die insurance helps the heirs of the married couple rather than either the husband or the wife. It is also called survivorship life insurance or dual-life insurance.
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My wealthiest client, who cannot seem to make what he considers big financial decisions without the "OK" from his banker, tells me, after I have presented him with a second-to-die insurance strategy, that he thinks the idea is a great one but is concerned that in hyper-inflationary times, this would become a bad investment.
A profit-sharing plan (PSP) could purchase second-to-die insurance.
Survivorship insurance, also know as second-to-die insurance, covers two lives, pays a death benefit upon the death of the second insured and typically costs less than two single life policies.
In Letter Ruling 9745019, this rationale was extended to a properly structured second-to-die insurance policy.
The Supplemental Retirement Legacy places emphasis on use of second-to-die insurance used in an irrevocable trust to help build cash value or use death benefit proceeds for supplemental retirement income.