Many parents take out life insurance policies to ensure their dependents have a financially secure future when they are not around to provide for them anymore. The benefits of such arrangements are numerous, and people are buying such covers every day. The good thing is that the life insurance policies come in different forms for you to choose from depending on your financial ability and preference.
Second to die life insurance is one such policy that many people are considering taking. It is a way of not only providing financial support to the dependents but it is also used for protecting the estate of the family. Two people take this cover, typically couples who pay premiums up until the death of the last one of the two. Upon their death, the benefit is paid to the beneficiaries who are mostly the children. The proceeds are used to pay for outstanding estate tax dues and the rest for supporting the children.
Benefits of taking out the Second to Die Insurance
The difference between the Second to Die whole life insurance and the other types of covers in the same category makes it unique. The following are some of the benefits you get with this policy:
- Easy to qualify
Underwriting is the process that determines whether you are eligible to take a cover or not. Now since the second to die policy covers two people, the couple, the underwriting is rather more lenient than it is the case for the other types of life insurance covers. Provided one of the spouses is healthy, the two qualify for the cover even if the other is considered un-insurable.
With most other insurance policies, both spouses should be insurable, meaning that their health and medical history should not pose a risk for the insurance company. However, the Second to Die cover will only need one of the two to be healthy.
- Cheaper premiums
Premium calculation focuses on the time the insured will be paying them for the provision of the cover under consideration. For the survivorship policy, the insured, who are the two spouses will be paying the premium for a long time, thereby making the amounts lower. As such, this policy is somewhat cheaper than most other life insurance policies. So, if the cost of the cover is one of the factors you are considering before taking out a policy, then the second to die insurance would be the better option.
- Retention of the Family estate
The second to die insurance cover is always the option for families with valuable estates. The tax on the property accumulates and is due after the last of the two parents are dead, and the burden would be on the remaining children. The cover, therefore, provides for the estate tax, meaning the property will remain in the family and not liquidated for the payment of the tax.
- Ensures inheritance
The main reason for life insurance covers is to provide an inheritance for the children after the death of the parents, and the second to die policy is no different. This can be essential when one or more children require more financial support, such as those with special needs.
Stephen Roy is a renowned insurance policy consultant in Chicago. Having been in this business for 20 years now, Stephen has published many insurance related articles on his blog. To learn more about second to die policy, please visit this website https://www.beamalife.com/