Second
to Die Life Insurance
If you will be
leaving a large estate behind you have a lot of decisions to make. This is
common for people who will be leaving money and property behind that amount to
a fair sum as there are ramifications of being wealthy that carry over to the
unknown. There are several things that one should consider with a large estate,
the major thing being who or what to leave the estate to. In most cases this
will go to the spouse. With this in mind you may want to consider the second to
die life insurance policy. This type of life insurance is rather new and is
making the burden upon a spouse a lot less when it comes to the large estates
that are sometimes left behind. There are several things about this kind of
life insurance that you should consider before making a policy purchase.
The second to die life insurance
policy is just like it sounds. It is meant to insure both husband and wife and
will not pay until the second person dies. The way the policy is designed makes
it a much more affordable premium which is appealing to a lot of people. For
the basics, the policy is written with the life expectancy of both people added
together which makes the price go down. The main down side that most people see
is that neither party will see any kind of pay out from the policy. This is not
a problem because the second to die life insurance policy is designed for
another reason all together.
In the 1980’s the government
passed a law that postpones estate taxes until both parties have died which
leaves the next of kin or sole beneficiary responsible for the taxes. These
taxes can be incredibly high for a large estate, especially one that includes a
lot of property and cash. So the second to die life insurance policy was
designed to pay the taxes for the next of kin when both parties die. This is in
response to the fact that the government allows a one time gift from the
deceased spouse to the other spouse of the entire estate amount with out any
kind of taxes involved. With this deduction the amount of the estate becomes
part of the estate from the living spouse which in essence could double the
amount of the estate taxes that are owed.
The second to die life insurance
policy is very effective for dealing with the estate tax issues for the
surviving parties. This type of policy tends to take some of the burden off of
the surviving person and allows them to be more at ease without having to worry
about the paying of taxes.