Survivorship life insurance

Most life insurance is straightforward, covering one person and ensuring financial security for their loved ones after they are gone. But what if your financial goals are shared, like protecting an estate, managing inheritance taxes or supporting a dependent’s long-term care? That’s where survivorship life insurance (also known as a second-to-die policy) steps in. 

This type of policy covers two people, with a death benefit paid out only after both have passed away. It could be a practical solution for couples or families looking to plan ahead without doubling their costs. Bankrate explores survivorship life insurance to help you determine if it’s the cost-effective strategy you’ve been looking for. 

How do survivorship policies work?

Survivorship life insurance takes a different approach than traditional policies. Instead of covering one person, it insures two lives under a single contract, with the payout delayed until both individuals have passed away. This setup often makes it a practical choice for those with shared financial goals. When the benefit is paid, it’s typically delivered as a lump sum to the beneficiaries, providing financial support exactly when it’s needed most.

Though commonly chosen by married couples, survivorship policies aren’t limited to spouses. They can also work well for business partners or family members with joint financial responsibilities. Because the risk is spread between two individuals, premiums are often more affordable than buying separate policies — an added advantage, especially if one person has health challenges that would typically drive up costs. 

Couples seeking life insurance coverage go through a joint underwriting process that enables insurers to determine their insurability, the rate they pay and the terms they receive in the policy. All these aspects of the policy remain unchanged with the death of the first spouse. As long as the surviving spouse continues to pay premiums on the policy, beneficiaries eventually receive the death benefit once the surviving spouse passes away.

The most common use of a joint life policy is for estate planning purposes. In this scenario, many survivorship policies come under the ownership of an irrevocable trust, also known as an irrevocable life insurance trust (ILIT). Because the primary purpose of the policy centers on providing money or assets to heirs or to provide a means to pay any money owed for federal, state and income taxes, survivorship policies can maximize estates and provide liquidity.

Because of the way that survivorship insurance is structured, these policies are usually whole life or universal policies and are not typically available as term life insurance. This means that it is a form of permanent life insurance designed to be in place until the end of life (although there is typically a maximum coverage age range of 95 to 121) instead of for a designated period of time.

Survivorship policies may also be a good idea for people who care for a special-needs family member who will need lifelong care. A survivorship policy can help ensure that this family member will have the funds needed for specialized care after the primary caretakers pass away.

What is the difference between joint life and survivorship life?

The term joint life insurance refers to two types of life insurance policies: first-to-die life insurance and second-to-die life insurance (or a survivorship policy).

Both first-to-die and survivorship cover each policyholder simultaneously under the same policy. However, under a survivorship policy, the death benefit is only paid to beneficiaries once the surviving policyholder dies. Under a first-to-die policy, the remaining policyholder is the beneficiary and receives the death benefit.

Compare life insurance providers quickly and easily

See which provider is right for you.

Age

Please select age

Coverage amount

The amount of coverage you need depends on many factors, including your age, income, mortgage and other debts and anticipated funeral expenses.

Please select Coverage amount

Policy type

Whole life insurance combines life insurance with an investment component.

• Coverage for life
• Tax-deferred savings benefit if premiums are paid
• 3 variations of permanent insurance: whole life, universal life and variable life include investment component

Term life insurance is precisely what the name implies: an insurance policy that is good for a specific term of time.

• Fixed premium over term
• No savings benefits
• Outliving policy or policy cancellation results in no money back

Please select Policy type

ZIP Code

Your information is secure

Find matches

Powered by Coverage.com (NPN: 19966249)

Advertising disclosure

This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions.

Insurance disclosure

Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in states where it is licensed. Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.

View rate

Why Lemonade? It's a fresh twist on life insurance: easy, accessible and affordable.

See more providers in

Choose from insurers in

Show More

Who needs a survivorship life insurance policy?

Survivorship policies could be worth exploring if you:

• Are concerned with estate planning and would like to take advantage of an ILIT.
• Have dependents who will need funds for specialized care after you and your partner pass away.
• Find individual life insurance policies come at a high cost due to unfavorable underwriting (your health or occupation, for example).
• Were declined or highly rated for life insurance but your spouse maintains good health (and is eligible for life insurance at a favorable rate class as a result).

Nonetheless, the benefits of a survivorship policy might apply to only very specific situations that make the delayed payout of the death benefit worthwhile. Due to the complex nature of this product, you might find it helpful to speak with a licensed life insurance agent or certified financial planner to determine if a survivorship policy makes sense for you and your family.

Why get survivorship life insurance?

While a somewhat unconventional life insurance product, survivorship life insurance policies could offer distinct advantages for those considered a good fit. Besides establishing security for dependent care, other survivorship life insurance advantages may include:

• Cost: Let’s say you both need life insurance but want to keep it affordable. A survivorship policy could be the perfect fit. While a single $500,000 survivorship policy might cost slightly more than two $250,000 individual policies, it’s often significantly less expensive than purchasing two $500,000 policies. Plus, if one of you has health issues, this type of coverage spreads the risk between both of you, making it easier (and often cheaper) to secure coverage than if the less healthy partner were to apply alone.
• Availability: Survivorship policies may be easier to qualify for. Even in cases where one of the policyholders faces extreme health afflictions, coverage of two people spreads the risk and can provide a window for insurers to accept less desirable policyholders.
• Estate tax planning: Worried about the impact of estate taxes on what you leave behind? Survivorship life insurance can be a practical solution, especially for affluent couples. Under the Unlimited Marital Deduction Law, assets transfer tax-free to a surviving spouse, but estate taxes kick in when the second spouse passes. A survivorship policy — as long as it’s structured properly — ensures your heirs have the funds to cover those taxes, so they don’t need to sell cherished assets or dip into savings.
• Preserving the future: Whether it’s a family business or a beloved property, you want the next generation to hold onto what you’ve built without financial strain. A survivorship policy’s death benefit can provide the liquidity your heirs need to cover debts, taxes or expenses, safeguarding their ability to retain meaningful assets.
• Charitable giving: A survivor life insurance plan can be established to provide part or all of the benefit to a charity of the choice of the policyholders

How do you get a survivorship policy?

Steps policyholders could take to purchase a survivorship life insurance policy include:

• Assess your needs: Before deciding if a survivorship policy is right for you, it may be a good idea to sit down with your partner to assess your needs. Do you plan on bequeathing a sizable inheritance to your loved ones? Do you have a special-needs dependent who needs long-term care? If so, a survivorship policy may be worth considering.
• Ask for recommendations: If you know someone who currently holds a survivorship life insurance policy, you might want to ask about their experience or if they have an insurer to recommend.
• Seek professional guidance: Financial advisors and estate planning attorneys understand the perils, pitfalls and loopholes of various insurance products. Their expertise ensures any policies purchased by a couple provide the required coverage levels.
• Look at insurers’ customer reviews: When considering any particular insurer, looking over customer reviews provides a snapshot of the level and quality of service provided by the agency.
• Compare quotes and coverage: Once couples narrow down their policy search to just a few insurers, compare quotes in terms of premiums and coverage to find the best deal.

By taking the time to perform due diligence before buying a survivorship policy, couples may achieve peace of mind. Knowing a policy can help them reach their estate planning goals while also meeting the needs of beneficiaries can alleviate worry and anxiety.

Frequently asked questions

• Are survivorship life insurance policies cheaper than individual life policies?

  They could be. In many cases, survivorship policies cost couples less to purchase than two individual permanent life insurance policies. This, however, can depend on the health status of each individual, as well as other underwriting concerns. Of course, the tradeoff of the savings comes with the knowledge that the surviving partner does not get a death benefit when the first person dies.

• Are survivorship policies available to couples that include a spouse with health problems?

  Usually. One of the more attractive features of survivorship policies is their less stringent underwriting evaluations. In the eyes of insurers, the risk around providing the policy decreases with coverage of two people instead of a single individual.

• What is the best life insurance company?

  The best life insurance company for you will vary based on personal preferences such as what policy you’re interested in and what level of customer service you’re looking for. To find the best provider for you, it can be helpful to talk with an independent insurance agent about your needs and generate quotes from multiple insurance carriers.

• What happens to survivorship policies during a divorce?

  Divorce has a way of making even the simplest financial arrangements feel complicated, and survivorship life insurance is no exception. The very purpose of this type of policy often no longer fits the needs of a divorcing couple. In many cases, this policy becomes one more item on the list to address during divorce proceedings, especially if it holds a cash value that might be considered a shared marital asset.

  That said, some survivorship policies offer a conversion option, allowing the joint-life coverage to be split into individual single-life policies. This can be a practical solution for both parties to maintain independent life insurance coverage. However, be prepared. Premiums for the new individual policies will likely be higher, as they reflect the separate risk profiles of each person.

  Navigating this situation requires careful consideration. Talking with both your insurer and your attorney can help you to fully understand your options and make informed decisions about how to handle the policy as part of your divorce agreement.