What is a second-to-die (survivorship) life insurance policy?

A second-to-die life insurance policy (also called survivorship life insurance) covers two lives—typically a married couple—and pays the death benefit only when the second insured person dies. This structure aligns with the unlimited marital deduction, which allows unlimited asset transfer between spouses without estate tax. The estate tax concern typically arises on the second death, when assets pass to heirs.

Because the policy doesn't pay until both insureds have passed, the premiums are significantly lower than two separate policies of equivalent face value. This makes survivorship life an efficient tool for funding estate taxes, equalizing inheritances, or leaving a charitable legacy.

Couples where one spouse has significant health issues may find this product particularly valuable—the healthier spouse's rating offsets the less-healthy spouse, resulting in an overall combined rate that may be more favorable than individual policies.

Survivorship life insurance is commonly used in ILIT strategies for estate planning, business succession planning for families with children in the business, and charitable giving programs. Guarantees are backed by the financial strength of the issuing carrier. A licensed agent and estate attorney can determine whether this structure fits your specific situation.