Second to Die Insurance
(A quick guide on everything you need to know)
Written by
Christine Lacagnina has written thousands of insurance-based articles for TrustedChoice.com by authoring consumable, understandable content.
Reviewed by
Neel Lane is an independent contract paralegal who specializes in Medicaid and VA benefits. He helps people access and maximize the benefits that they're entitled to. He has over 30 years of experience in this area.
Life is a journey of acquiring all kinds of possessions — overpriced cars, fancy degrees, even that junk drawer filled with ticket stubs and dried-out hotel pens. These are the things that make a person feel accomplished.
Sadly, they all stay behind when you “move on,” including any remaining taxes and medical bills. Luckily, second-to-die joint life insurance can help you and your spouse tie up any financial loose ends after you're both gone.
Our independent agents are here to help you tie those loose ends up. They’ll walk you through all the ins and outs of joint life insurance and eliminate the hassle of “the search” by delivering a handpicked selection of top policies that are perfect for you.
Why Do I Need Life Insurance?
Fears of death are common, but it's not just mortality itself that makes people want to plug their ears and hum loudly in denial. Many also fear being a financial burden on their heirs after they pass away, or they fear not leaving an inheritance behind to help pay for things like tuition.
But sweeping it under the rug isn’t the answer, it just makes your rug all bumpy with avoided decisions underneath.
Having a life insurance policy can help establish a fund for your heirs so when that bell finally tolls, you'll know they have an inheritance coming. Life insurance can also help to pay for estate taxes or create estate liquidity, or simply be used as a tax-advantaged way to save and invest.
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What Is Joint Life Insurance?
Basically, it’s like buy one get one. You pay a lower premium than buying policies separately, and you get life insurance for two. It combines your and your partner's life insurance into one plan with one ultimate payout.
Now within joint life insurance there are first- and second-to-die options. With a first-to-die policy, the benefit is paid out when the first of you dies. With second-to-die — you guessed it — the benefit payout comes after the second partner dies.
What Are the Advantages of a Second-to-Die Policy?
- The surviving spouse doesn’t have to worry about paying hefty estate taxes when their partner dies.
- Less risk for the insurance company if one partner is seriously ill since the payout will only come after the second death. This could mean a lower premium for couples with one unhealthy partner.
- Joint life insurance policies can end up being cheaper since they're one policy with only one premium. Premiums are also typically lower for joint plans than for individual plans.
- It's easier to qualify for joint coverage than for individual plans. This is especially true if one partner is in poor health since only one payout means less risk for the insurance company.
- It can be used to build an estate, not just to protect an existing estate from taxes. The policy is set up to ensure that your beneficiaries will receive some kind of inheritance, no matter how much of your savings you and your partner spend.
- Second-to-die policies can help keep a family home in the family, since surviving heirs won't have to worry about selling the property to pay off taxes.
Are There Any Disadvantages of a Second-to-Die Policy?
If a couple separates, it may not be simple to halve their insurance policy. Separating a joint policy is often complicated, but asking for an insurance rider to amend the coverage to two separate plans in the event of a separation could prevent issues. Ask your agent about it before you sign over that first check.
Are There Any Insurance Policies I Should Stay away from When Considering Coverage?
Possibly. In general, sticking with a term policy for second-to-die insurance is most often a safe bet, especially for cost-benefit purposes. In addition to being able to specify the amount of time you want your coverage to last, a term policy will offer a significantly lower premium than a permanent policy.
There’s pretty much a life insurance option out there for everyone. If you’re ill, older, or just hate long commitments, there’s a policy that will match your needs. They all have their advantages and disadvantages. The best thing to do is just ask a trusted expert about your options and they’ll always help guide you toward the right route for you.
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What's So Great about an Independent Agent?
Insurance policies can be complex and confusing, and let's face it, browsing and discussing second-to-die life insurance policies can be downright depressing. Independent agents exist to simplify the process and save you some grief.
Independent agents are there to make sure you get the absolute best deal, and the one that meets your unique needs. They shop and compare insurance quotes for you, and they'll break down all the jargon so that you understand exactly what you're getting.
Finding and Comparing Second-to-Die Life Insurance Quotes
Our highly qualified independent agents will review your needs and help you evaluate which type of second-to-die joint life insurance makes the most sense for you. They'll also compare policies and quotes from multiple insurance companies to make sure you have the best protection out there. They'll hook you up in a comprehensive and affordable way.