What is second-to-die life insurance?

Second-to-die (survivorship) life insurance covers two people—typically spouses—under a single policy. The death benefit is paid after the second insured person dies, not the first. Because the carrier only pays one claim instead of two, premiums are substantially lower than two separate individual policies with equivalent death benefits.

Survivorship insurance is primarily used for estate planning purposes. Federal estate taxes are generally deferred until the death of the surviving spouse (the unlimited marital deduction). A second-to-die policy provides liquidity precisely when it is needed—when the second spouse dies and the estate tax bill is due—without paying premiums for two separate policies throughout both lives.

The strategy is particularly valuable for high-net-worth Nevada couples who expect their combined estate to exceed the federal estate tax exemption. It is also used to fund a special needs trust for a disabled child who will need lifetime financial support after both parents are gone.

Because the benefit is tied to the second death, this policy type does not address income replacement needs during either spouse's lifetime.