Survivorship life insurance (“second-to-die” or survivor insurance) provides one policy that insures the lives of two people, usually spouses. No proceeds are paid when the first spouse dies. The policy remains in effect and premiums may need to be paid. The death benefit is not paid to the beneficiary until the death of the second insured.
Survivorship life insurance may be a good strategy in cases where one member of a couple is in less than good health, making other types of insurance extremely expensive. Since two lives are insured, premiums for survivorship life policies are relatively low cost compared to individual policies on each spouse’s life.
Other types of insurance to consider:
Term insurance for temporary simplified coverage with no cash value.
Permanent life insurance is where the policy is for the life of the insured and the policy accumulates cash value.
Whole life insurance policy which provides both a death benefit and a cash value component. The policy is designed to remain in force for a lifetime and premiums stay level and the death benefit is guaranteed.
Universal life insurance for permanent coverage flexibility and less emphasis on cash value.
Variable* universal life insurance for permanent coverage and potentially higher cash value through investment options that involve risks including possible loss of principal amount invested.
Disability insurance designed to replace a percentage of earned income if accident or illness prevents the beneficiary from pursuing his or her livelihood.
Long-term care insurance is a policy that pays some or all costs of nursing home care for qualified insureds. Premiums are based on the age of the applicant and are projected to remain stable for the life of the policy. Premium payments stop when the insured meets the qualifications for long-term care, which include medical necessity, cognitive impairment, and inability to carry out certain activities of daily living. Group policies are available.