Estate Planning in Florida: Your Guide to Survivorship Life Insurance Policies
According to survey data cited by MarketWatch, slightly more than half of Americans are covered by at least one life insurance policy. Life insurance can provide a much needed source of financial protection during an otherwise difficult time. There are many types of life insurance policies in Florida, including survivorship life insurance. It could be the right option for you and your family. Below, our St. Petersburg estate planning attorney provides a comprehensive guide to the key things to know about survivorship life insurance policies in Florida.
What is Survivorship Life Insurance?
Survivorship life insurance is a type of life insurance that you can buy in Florida that you may hear referred to as “second to die” coverage. Broadly explained, it is a type of policy that covers two people at once. Most often, those two people are spouses. However, there are some exceptions and it is not a requirement that you have to be married to get this coverage in Florida. Unlike individual life insurance, the death benefit is paid only after both insured individuals have passed away.
Know the Advantages of Survivorship Life Insurance as an Estate Planning Tool
Survivorship life insurance offers several different benefits that can make it a very valuable estate planning resource for certain situations. Here are the core advantages of this type of policy:
- Lower Premiums: The policy pays out only after both insureds die—or for that reason the premiums are typically lower than two separate policies would be. You can potentially save money on life insurance costs on the front end.
- Easier to Insure Vulnerable Party: If one spouse has significant health issues, survivorship policies may still be issued since they are underwritten based on joint life expectancy. For some people, a survivorship policy is one of the only ways to get coverage at all.
- Liquidity for the Estate: One of the best reasons to get survivorship life insurance is that it provides a tax-free death benefit that can be used to pay federal estate taxes, settle debts, or maintain family businesses after both of the policyholders have passed away. It can be a wealth transfer tool that helps families.
Survivorship Policies are Certainly Not the Right Life Insurance Option for Every Situation
When the first person dies, a survivorship life insurance policy does not pay out. For that reason, it is not a great choice for a person or family looking for that type of protection. For example, imagine a married couple in their 40’s has two kids. They want to get protection for their family in case something goes wrong so they buy life insurance. A survivorship policy is generally not the right option for that situation. If one spouse passes away, the policy would not pay anything. There would be no support for the young family.
Consult With Our St. Petersburg Estate Planning Lawyer Today
At Fisher & Wilsey, P.A., our St. Petersburg estate planning attorney invests the time, resources, and personal attention to help people and families find the best solutions. If you have any questions about survivorship life insurance policies, please call us now or contact us online for a fully private case review. With an office in St. Petersburg, we serve communities all across Florida.
Source:
marketwatch.com/insurance-services/life-insurance/life-insurance-statistics/
