In this day and age, Life insurance is an incredible investment that everyone should consider purchasing for the sake of their loved ones’ future. Basically, second to die insurance is one of the safest safety net approach to ensuring that your loved ones (or heirs) will have the financial stability that they need when you are long gone. Therefore, owing to the fact that no one knows what tomorrow holds or exactly when death will come striking, it is best to take care of your family now.
The very first reason why the second to die insurance is a safety net that you should consider is the fact that this kind of insurance will free off your family from debts and also give them the money that they will definitely need in the future.
But why second to die insurance when there are so many life insurance policies that you can also purchase? Well, this is a question that people keep asking from time to time. Lucky enough, this post is meant to shed some light to individuals who have been thinking of purchasing a life insurance but don’t really know which path they should take.
For starters, there is no better deal out there than the second to die term life insurance! Essentially, it is the kind of life insurance policies whose most applicants are partners who are seeking to leave their assets to their heirs once they depart from this world.
Another intriguing fact about this customized option is that they can cover even more than one individual for less. Yes, unlike other policies that might cost you a fortune, second to die or first to die life insurance policy costs are more flexible.
However, here is what you need to remember when purchasing second to die insurance;
Second to die policies are a good selection for couples who are concerned about stabilizing their children’s financial position, creating a legacy and above all avoiding estate taxes. While life insurance death benefits can be omitted from federal and estate taxes, the paid benefit is however included in the beneficiary’s estate.
This simply means that, in a first to die policy covering two partners, there might be zero tax when the benefit is paid out, nonetheless the benefit would then be considered part of the second person’s estate when he (or she) passes on.
Lastly, this kind of life insurance policy comes with a spendthrift clause. This will keep your children in the right path and slow down their spending if they at all try to finish up the death benefits too quickly. Thanks to this clause, your heirs can get the benefits in a systematic manner rather than getting it as a lump sum money amount.