Second To Die Life Insurance
There can be many purposes for second to die life insurance from covering estate taxes to setting aside funds for charitable purposes after death. The main difference between these policies and other products is that these policies will cover two people rather than just one. Generally, a husband and wife will be the individuals who take out this type of coverage. The policy will not pay out until both parties have passed away. This approach can be particularly helpful if one spouse has health issues that prevent them from obtaining coverage any other way. Also, since two lives are insured rather than the typical single life policy, the cost of premiums can be substantially lower. A second to die life insurance policy might also be called survivorship or joint insurance. Estate taxes can be very high and can decrease the value of an estate after both parties have died. Purchasing a survivorship policy to cover the cost of taxes can insure that a full estate is provided for survivors without being decimated by taxes. This coverage is generally only beneficial to couples who expect to leave a large estate behind and there is generally a minimum amount of coverage that can be purchased. Couples with smaller estates understand that the surviving spouse will need to live off the estate after a spouse has passed away and may not be in the market for this kind of policy. Before selecting coverage of this nature, a client would be wise to receive counseling from both an estate planner and an insurance agent.
Aside from the possibility of lower premiums, there are several other benefits to be gained from purchasing second to die life insurance. In general, these policies are relatively easy to qualify for. One reason for this is that the risks that are associated with insuring two individuals are regarded to be a great deal lower than simply insuring one person. The benefits of gaining protection from the cost of estate taxes is attractive to many clients as well. If an estate is large, it is not uncommon for traditional life insurance policies to be used to simply cover the cost of taxes. A second to die life insurance policy can provide one way for couples to defer the payment of estate taxes until after the second party has passed away, leaving more of the estate for the remaining spouse and removing a large tax burden for the survivor. After both insured parties have passed away, heirs will be spared the necessity of selling the family home or liquidating other assets in order to retire the estate tax debt. Small estates will usually not find too many benefits in this approach, but there may be other motivations for considering these plans. Riders may be available for clients who would prefer the option of dividing the double policy into two single ones at some later date.
Some of the other motivating factors that could make second to die life insurance attractive to consumers could include the ability to set up a charitable trust or to provide for the needs of a disabled child. In some families, both parents have served as caretaker s for children who, for one reason or another, require ongoing special care. Worry over how the needs of this child will be met when both parents are gone is an area of special concern for many couples. Knowing that a disabled child will continue to be cared for after both parents are gone can bring real peace of mind. A second to die life insurance policy can be used to set aside funds that will provide for a special needs offspring for the rest of the child's life. Professionals in the field can offer advice and counsel to clients facing this difficult problem. Consumers with large estates often wish to leave behind a charitable donation without depriving heirs of their inheritance. Purchasing survivorship policies can be a good way to achieve this goal. Another important benefit of this type of insurance product is that it does not force couples to develop separate plans regarding which spouse will pass away first. Whatever the motivation, these policies can address the anxieties of families with very specific needs and concerns.
When a couple applies for a second to die life insurance policy, approval could be a concern. Obtaining new policies late in life can be difficult. But for these plans, as long as both individuals are not in poor health, approval is usually easy to attain. While dealing with such life and death issues can be complicated, planning ahead can make things less stressful for surviving loved ones. The Bible tells believers to hope in God and depend on His mercy. Let thy mercy, O Lord, be upon us, according as we hope in thee. (Psalm 33:22)
Acquiring a second to die life insurance policy does not need to be expensive. A financial adviser can provide clients with an estimate of the amount of tax an estate will owe. There is not need to purchase a policy for an amount that is larger than this estimate. Paying premiums on an annual basis, rather than on a monthly, quarterly or biannual basis, can save money as well. These policies can also be a more cost effective way to set up trusts for charities and heirs. Whatever choice a client might make, having options in coverage can make a big difference.
Accidental Life InsuranceChoosing to purchase accidental life insurance in addition to other coverage can add extra protection against an unexpected tragedy. These policies might be added as a rider to an existing policy. Such protection is generally available as a stand alone policy as well. If a policyholder should meet an untimely death due to an accident, a beneficiary would receive payment. Should the insured individual survive the accident, but end up dismembered or disabled in some way as a direct result of the accident, the policyholder would receive payment. There can be limitations that are attached to accidental life insurance policies and consumers should make sure that they thoroughly understand just what the coverage will apply to before signing on. One benefit of this type of coverage is that it is usually relatively inexpensive. But a major drawback might be found in the fact that there are limits to what policies of this nature will cover. Obviously, a policyholder would be covered should they loose their life in some kind of accident. Most of these policies are also known as accidental death and dismemberment plans. Dismemberment is generally defined as the lose of a limb, speech, eyesight, or hearing due to an accident. There may be time limits involved with some forms of coverage. Some policies will only pay out if the insured individual dies within three months of the original accident. The dismemberment aspect of these policy will pay out in a unique way. A policy holder may not receive a one hundred percent payment if only one limb was lost in an accident.
There are various pros and cons that are associated with accidental life insurance. Some consumers assume that the purchase of this coverage would mean that a policyholder would be covered if they were to be fatally injured in an accident. This may not always be the case. Many accidents and activities might be excluded from coverage. It all depends on the terms and wording of an individual policy. Risky activities such as skydiving or accidents that happen as a result of participation in certain extreme sports are often not covered. Death that occurs as a result of combat is generally not covered. A potential policyholder should take the time to read the fine print and go over the details of this coverage with an agent before signing on the dotted line. Banks and credit cards frequently offer some type of accidental life insurance. While the premiums on these policies are usually extremely affordable, the amount of coverage can be very limited. A consumer should make sure that they understand what type of coverage they are buying, otherwise they may be simply throwing money away. Policyholders should ask for a specific definition of the term accidental death as it applies to the policy that is being discussed. Is there a time limit that applies to the distance between the initial accident and the insured individual's death? Are there reasons and stipulations that could prevent a beneficiary from collecting on the policy in the event of the insured individual's death? While these questions might seem a little difficult if not downright morbid, it is necessary that they be asked.
Perhaps the best way to understand the effectiveness of accidental life insurance is to look at standard life insurance. The purpose of a basic policy is to attempt to make up for the lost income of an insured individual should that person pass away. Beneficiaries receive a sum of money upon the death of the insured person. The size of that sum will be dependant upon the size of the policy that was purchased. Standard coverage will generally apply no matter what the cause of death was, unless the death is the result of a suicide. The proceeds of these policies may also be applied to various funeral costs , probate expenses, or taxes. How this money will be spent is usually completely up to the beneficiary. A whole life policy can have a cash value on its own while term policies have no separate value. When it comes to accidental life insurance, this is generally regarded as a term insurance product. Accidental death and dismemberment policies, or AD&D, will only pay out when a death is the result of a covered accident or when an individual looses the use of a limb, speech, hearing, or eyesight. Standard policies are not limited to death that is the result of an accident.
Policies that are geared toward travelers are another type of accidental life insurance that are widely available. These products are generally temporary and will apply to travel during a specified period of time. Although no one wants to travel under a cloud of fear, the protection that is offered by this kind of coverage can take the worry out of leaving home. According to the Bible, wherever a believer goes, God is ordering that believer's steps. "The steps of a good man are ordered by the Lord: and he delighteth in his way." (Psalm 37:23)
Many consumers are attracted to accidental life insurance out of concern over the possibility of becoming disabled. A quality product can offer financial stability in the event of a disabling accident. The premiums that are paid on these policies will depend on a variety of factors. These factors will generally include age, occupation, overall health, gender, as well as other stipulations. What ever type of coverage a consumer might be interested in, careful research and a thorough understanding of the product that is being considered are necessary.