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What
is Last Survivor Life Insurance?
Last survivor life insurance, or survivorship life insurance, is a type
of joint whole life, designed mainly
for married couples.
Federal estate taxes are not collected on property left to a spouse, but
when the surviving spouse dies, estate taxes are due and can be very high.
A last survivor life insurance policy pays a benefit only after both spouses have died,
providing funds for estate taxes.
There are three advantages of last survivor life insurance over individual
coverage:
- Lower premiums -- more cost effective than two individual policies.
- Medical underwriting standards may be eased with respect to one of
the insured's, due to second death payouts.
- Lower "economic benefit" reportable for income taxes in Split Dollar
Plans (often 10 times lower).
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