How Survivorship Planning Works: Case Example

Insured: Male (65) and Female (57)
Age at Death: 94 and 87
Policy Type: Survivorship
Value: $500,000

This couple had several term life insurance policies – one that was nearing conversion, one where conversion had passed, and two others with extensive terms before expiration. The couple felt the policy conversion was cost prohibitive and they were interested in an alternative to maintaining the two remaining policies. As part of their financial goals, they wanted to be able to enjoy their retirement years without financial worry, but still leave some form of inheritance to their two children.

Wanting to find an alternative to paying the high premiums typical of term life policies, they took out a $500,000 survivorship policy that paid out after both of their deaths. This enabled the couple to use all their savings to support their twilight year while each of their two children inherited $250,000, nontaxable.