Estate planning isn’t just about distributing assets — it’s about protecting your family’s financial future. One often-overlooked tool that can make a big difference is a survivorship life insurance policy, also known as second-to-die life insurance.
These policies can help couples minimize estate taxes, provide liquidity for heirs, and ensure a smoother transfer of wealth. Here’s how they work and why they’re so valuable in a comprehensive estate plan.
What Is a Survivorship Life Insurance Policy?
A survivorship life insurance policy insures two people — typically spouses — under one policy. Unlike traditional life insurance, the death benefit is paid after both insured individuals pass away.
This structure makes it ideal for covering estate taxes and providing financial support for heirs once the entire estate transfers.
Key features:
- Covers two people on a single policy
- Pays the death benefit only after both have died
- Premiums are often lower than two separate policies
- Commonly used by married couples for estate planning
Why Survivorship Policies Are Useful in Estate Planning
1. Pay Estate Taxes Without Selling Assets
When an estate includes illiquid assets — such as a family business, real estate, or investments — heirs may face large tax bills but lack the cash to pay them.
A survivorship life policy creates immediate liquidity for covering federal estate taxes, probate costs, and debts. This prevents the forced sale of family assets at unfavorable prices.
Learn more about estate tax strategies in Georgia and how proper planning can preserve family wealth.
2. Provide for Heirs and Equalize Inheritances
If you own a family business or property that will go to one child, a survivorship policy can balance inheritances by providing equivalent value to other heirs.
This helps prevent family disputes and ensures fairness when assets can’t easily be divided.
3. Support Charitable Giving Goals
Couples who wish to leave a lasting legacy can use survivorship policies to fund charitable trusts or donations. The death benefit can go directly to a foundation or charity of your choice, maximizing impact while minimizing taxes.
Learn more about combining insurance with charitable trust planning in Georgia.
4. Lower Cost Than Two Individual Policies
Because the policy doesn’t pay out until the second death, insurers assume a longer payout period — which typically means lower premiums compared to two separate life insurance plans.
This makes survivorship coverage more affordable for couples who want long-term protection and estate liquidity.
5. Simplify Wealth Transfer Between Spouses
In Georgia, property passing between spouses is not subject to estate tax due to the marital deduction. However, taxes may apply when the surviving spouse dies.
A survivorship policy ensures that heirs have funds available to cover those taxes when both parents pass, preventing unnecessary financial strain.
For more background on marital deduction and estate transfers, see the IRS Estate and Gift Tax Guide.
When a Survivorship Policy Makes Sense
Survivorship life insurance is most beneficial for:
- Married couples with large or illiquid estates
- Families with business or real estate holdings
- Parents wanting to leave equal inheritances
- Individuals interested in charitable giving through trusts
- Those looking for affordable estate tax coverage
Working With an Estate Planning Attorney
A survivorship policy should fit seamlessly into your overall estate plan — not stand alone. The proceeds can be placed into an irrevocable life insurance trust (ILIT) to keep them out of your taxable estate and protect them from creditors.
Our Georgia estate planning attorneys can help structure your policy and trust to maximize benefits and compliance with Georgia law.
Final Thoughts
Survivorship life insurance can be a powerful tool for protecting your legacy, minimizing taxes, and providing long-term financial security for your family. It’s an affordable, flexible solution that complements wills, trusts, and other estate planning tools.
If you’re exploring ways to secure your estate and protect your loved ones, contact Hurban Law to learn how a survivorship life insurance policy can strengthen your estate plan.
