How does second-to-die life insurance differ from whole life and term?
The key difference between a second-to-die life insurance policy and traditional whole life and term policies is that a second-to-die policy insures two lives rather than one. If you have a traditional whole life or term policy that insures only your own life, the policy will pay off as soon as you pass away. A second-to-die policy can be either a whole life or term policy, but the benefits won’t be paid until the second policyholder dies as well. When an insurance company writes a second-to-die policy, it knows that it probably won’t have to pay off any time soon because the payout won’t be triggered until two people (rather than one) pass away. As a result, insurers charge much lower rates for second-to-die whole life or term coverage than for policies that insure only one life.
