How To Understand If a Joint Insurance Policy is Right for Your Family?

The life on the internet shows that there are couples who do everything together. They pick wedding dresses together, they choose their first home together, and they even take their first baby photographers together. It makes us think, whether couples should extend their courtship to something more serious. After marriage, spouses are likely to share marital wealth, estate and assets. So what happens a long time into the future when one of them passes away and leaves no wills behind for their children and grandchildren? Who decides how to take charge of their lovely home, take care of the estate they have built bit by bit and how to take responsibility for their business?

How to secure your future by picking the right insurance right now?
Looks like, there is an excellent solution for all these financial woes and property conundrums for couples who love to do things together. A second to die policy can sum up all the estate taxes, property maintenance costs and death taxes in the form of a final payout upon the death of the second insured. It is just like any other life insurance policy. It is also a permanent insurance policy, but it takes care of two people at one go. The premium prices are much cheaper than regular insurance for two people, and it keeps the unpleasant nagging thoughts of property management at bay from a happy married life.

There are quite a few joint insurance policies in the league of a second to die insurance policies that fall under the category of term life insurance. These usually expire after 20 to 30 years. They have cash values that incur annual interest. The trick is to know the kind of policy you are buying before you sign on the dotted line. When you are interested in looking out for your surviving spouse and your children, a survivor ship policy is what you should be looking at right now.

Why is a second to die policy suitable for you?
At this point, you may be wondering why you cannot go with the usual and more traditional first to die policy. It is very common for people to think of joint policies to be convoluted and less rewarding. However, when you have to get insurance for two people under separate insurance policies, the costs of double premiums per year are much higher. It is undoubtedly much cheaper for an insurance company to underwrite two people under the same plan. It is not a scam! It is low priced because the risk involved is much less. The company does not have to pay until the death of the last survivor. In such cases, the chances of the policies expiring are much higher than both the holders dying within the term.

Can they help special needs children?
There are parents out there, who are worried about their special needs members who might be incapable of taking care of themselves financially after their passing. In reality, a vast number of couples get second to die policies for the sake of their children, who may need lifelong care and attention. This kind of a permanent plan is capable of providing monetary support to the children after the death of both parents. Using survivor ship insurance with disability insurance often secures the finances of a special needs kid. However, a word with your attorney can always help you with further extensive estate planning.

The two leading risks of survivor ship policies
The only risk arises in the event of a divorce. Maintaining any insurance policy alongside divorce proceedings can become very complicated and expensive. There are instances where the plan was a part of an irrevocable trust. In such cases, the couple can divide the policy into two parts. They can split it equally and take charge of half the payment annually. If one spouse decides that they do not need to pay for the policy post-separation, they can stop payment. There is no way to legally compel them to pay. If both of them decide that they do not need the policy, they can stop paying, and the policy will lapse.

A very similar case arises when one of the holders die, and the surviving spouse does not have the financial ability to pay for the premiums. There are cases where the adult children have helped the survivor to pay the premiums. However, in case the policy lapses the US government may get part of the estate.

Last to die policies and survivor ship policies are great if you want to have a plan for your children and grandchildren. Nonetheless, you need to be very careful about the insurer you are working with and the company’s reputation for payout. Always talk to your estate lawyer or your attorney, when you are about to pick a second to die policy to secure the future of your next generations.

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