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Reduce The Burden on Your Children and Heirs With Second to Life Policies

Should you be concerned about what happens to the estate that you leave behind after your death?  Well, there should not be reasons to worry about you when you are not there, but human sentiments and emotions play differently thinking about the heirs. Rightly, you could be concerned about how much the heirs would be comfortable in preserving the estate by meeting the expenses related to estate taxes. With the purpose of providing funds for paying estate taxes the property after your death, your search for suitable financial tools and get attracted to survivorship insurance. The survivorship insurance, also known as second to die term life insurance should meet your expectation in estate planning. The beauty of the policy is that it takes care of your family in a unique way and encourages the survivors to preserve the estate that you leave behind.

A policy for estate planning

Looking at the structure of the survivorship insurance policy together with the death benefit that comes with it, there should be no doubt that the plan is ideal for use in estate planning. It is a cost-effective way of taking a life insurance policy that covers the husband and wife for providing benefits to the heirs only when both insured persons die. That the surviving partner does not receive any benefit like other life insurance policies, make survivorship insurance very special. Although estate planning is the most prominent cause for taking such policy, it has some other use too. Parents who have differently abled children can use the plan to provide support to the child when both parents die. 

Consider the relevance of federal laws

The survivorship policy became popular in the 1980s and 1990s because the federal regulations permitted couples to defer the payment of estate taxes that could stretch even until the time they die. It meant that you could stop paying estate taxes and instead take up a second to die insurance policy that would provide the fund to the heirs on whom the estate would bestow. The plan aims at easing the lives of heirs who would receive ready money to take care of expenses related to maintaining the property and preserving it. On the one hand, it helps couples to enjoy the money they have without worrying about paying estate taxes that would have depleted their finances and on the other hand, it relieves the heirs who know that they could settle the estate taxes from the proceeds of the policy.

Second to die insurance – working modality

Tax saving and flexibility are the unique selling points of second to die insurance policies that are about to complete forty years by the end of this decade. With the target of covering more than what you intend to receive a death benefit, you can opt for paying a single premium or pay annual premiums according to the structure of payment you choose.  The excess keeps growing tax-deferred and help build cash deposit that takes care of all or some of the higher premium that you have to bear with increasing age. The interest you earn on the deposit depends on the existing federal rate of interest that is quite low as compared what you would have made in the eighties and nineties. 

Have a second look

If you already have a second to die policy, it is a prudent move to ask the insurer for reviewing the plan to figure out what you would receive in the event of your death. Since the financial objectives keep changing with age, you might like to reduce the death benefit so that the cash reserves last longer. If you feel the return on the cash is good enough, you could pump in more money, do nothing at all, buy another policy instead of it or even think about selling the policy. Seek the guidance of a knowledgeable and experienced insurance agent in this matter.

Carry on with the assets without concern

Your assets would qualify for marital deduction under the federal laws, and you can pass on the assets (unlimited amount) to your spouse when you die. The spouse does not have to bear the burden of estate taxes during her lifetime. It is only when the spouse dies that the liability of estate taxes pass on to the heirs. The second to die policy now comes into play as the heirs receive the death benefit, which is a significant sum of money that helps them pay the estate taxes together with other estate expenses.  The heirs would thus find it easy to preserve the estate and even make it grow.

There is no better way than to buy a survivorship insurance life policy to ensure that your heirs do not find any difficulty in keeping the property that you have earmarked for them.

Reduce The Burden on Your Children and Heirs With Second to Life Policies Reduce The Burden on Your Children and Heirs With Second to Life Policies Reviewed by Lokesh kumar on 12:36 PM Rating: 5