What is a Second to Die Life Insurance Policy

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 without 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. Learn more about term life insurance for children and get rates for term life insurance now.