Whats the difference between life insurance and survivorship life insurance?
Individual life insurance is written on the life of one person, while a survivorship life insurance contract is a single policy written on the lives of two people. Death benefits from a survivorship life policy are paid to a designated beneficiary usually an irrevocable trust after both insureds are deceased. Survivorship life insurance most often is used for estate planning purposes, with death benefits used for paying taxes, caring for a handicapped child, or as a charitable gift. It’s important to know the value of your estate including real estate, bank accounts, stocks, bonds, and personal belongings because federal estate taxes are an issue for couples with joint holdings of $1.3 million or more.
