A couple for estate planning purposes may create one life insurance policy that pays out when the last surviving person passes away. The product used for this is called a SUL or Survivor Universal Life. To lock down the death benefit, a lifetime guarantee is usually part of the coverage, so look for the the letter G in the mix, as in SUL-G. It is less expensive to have a joint policy as a couple than two separate individual policies. Also you qualify for coverage even if one of you is uninsurable or in poor health. It’s uses are generally:
- Estate Taxes
- Even Out an Inheritance , as in leaving one house but having two children
- Charitable Gifts
- Provide for Special Needs Dependends
- Pay for income tax on a inherited qualified plan
- Fund buy-sell agreements when the second owner dies
There are many new SUL’s being introduced in 2011: ING has “ING SUL-GDB” as in Survivor Universal Life – Guaranteed Death Benefit, and Nationwide has “YourLife No-Lapse Guarantee SUL II”. I reviewed ING and Nationwide yesterday and have made a pleasant discovery on how competitive United of Omaha “Guaranteed Universal Life Survivor”when running a quote today.
If you go to an estate planning attorney that recommends a survivor life insurance policy, make sure you contact an independent life insurance agent and broker, like myself, that can comparison quote all the major carriers, and shop for the best deal. Why not, the quotes are free. Do not assume an estate planning attorney, financial advisor or CPA is an expert on life insurance. Often life insurance business is funneled into someone’s favored carrier, and that choice is not the best deal out there.