Survivorship life insurance policy is one type of life insurance that is already very popular particular with families operating businesses and individuals who came together to operate a single business as business partners. Read also: What You Should Know About Survivorship Life Insurance.
Although only offered by a few life insurance companies, the availability and uptake of survivorship life insurance policy coverage is bound to increase in the coming few years. The increase is certainly because of the benefits that the coverage provides for. These include:
Affordability – This is perhaps the most affordable of all life insurance polices. Its affordability stems from the fact that the premium rate is calculated based on the lives of two or more people insured. In any case, a life insurance company is only obligated to pay death payment upon the death of the last person indicated on the policy, a fact that contributes to its affordability. Read also: 5 Valuable Life Insurance Tips to Consider When Buying Insurance.
Ease of access – Unlike other types of life insurance policies, survivor life insurance policy is the easiest to access. As a matter of fact, life insurance companies readily underwrite the policy for couples and other partners without due regard to their health status. For instance, you may be disqualified from accessing traditional life insurance but may be qualified to survivorship life insurance cover when you apply as a couple.
Payment benefit – Just like with traditional life insurance policy, this policy guarantees payment upon the death of the last person insured. There is non doubt that apart from paying business estate taxes, beneficiaries can use part of the payment to increase the scope of business amongst other possibilities.
Variability – This type of insurance coverage is variable. You can purchase it as either universal or term life insurance policy. Universal survivorship life insurance policy is in particular very beneficial considering the fact that you can obtain a loan on it. It also provides for other riders including payment in case of a serious accident. Read also: Why They Call It Universal Life Insurance?
Estate preservation – The fact that it provides for death payment upon the death of the last person insured means that your business or your any other estate remains secure as payments go toward paying estate taxes and other financial obligations relating to the same.
It is worth pointing out that the use of this type of policy is not limited to business estates. Buying this type of policy is very beneficial in case you have a child who needs special are. Proceeds from the policy upon the death of the last insured person can easily go towards catering for the needs of such a child.Just like with buying any other type of life insurance policy, there are facts you need to establish when shopping for survivor life insurance policy.
The fact that changes in life affect insurance polices requires that you ascertain what happens when divorce when still paying premiums on the policy. Note that some service providers sell policies that allow you to split the policy into two separate survivor life insurance policies, which you may consider buying.