What is a "survivorship life insurance" policy?

A survivorship life insurance policy is designed to cover two individuals, typically spouses, and pays out the death benefit only after the second insured person passes away. This type of policy is often used as a financial planning tool to provide funds for heirs, cover estate taxes, or fulfill other financial obligations after both spouses have died.

Choosing this type of policy can be advantageous because it often has lower premiums than two separate whole life policies, and the death benefit can be significant, ensuring that the beneficiaries receive a substantial payout without the financial burden of premium payments for two individual policies. This is particularly useful in estate planning, helping families manage financial responsibilities after both insured individuals are deceased.