What Is Variable Survivorship Life Insurance?
Variable Survivorship Life Insurance, alternatively known as “survivorship variable life insurance” or “last-survivor life insurance,” is a dual-coverage policy that only pays out after both insured parties have passed away. This insurance mingles the thrilling risk of market investments with the somber certainty of eventual death, providing a fiscal bridge over troubled waters for the surviving beneficiaries.
How Does It Work?
This insurance model weaves together the threads of investment and assurance into a safety net that spans the lives of two individuals. A fraction of each premium tickles the belly of the market beast, potentially growing over time depending on the performance of chosen investments - all of which are under the brave or foolhardy discretion of the policyholder. The rest of the premium funnels into less exciting, albeit necessary, expenditures like administrative costs and the ever-looming death benefit.
Legally strapped into the rollercoaster of the securities world, this policy type is regulated by none other than the Securities and Exchange Commission, ensuring your risky venture is at least under responsible supervision.
Reasons It Might Just Be Your Cup of Tea
Investment Opportunities Galore
Imagine a world where your life insurance premium isn’t just a solemn promise of future support but an active player in the stock market! This policy allows for that with options that could lead to significant growth in cash value, depending on market conditions.
Economical Approach
Why insure one when you can insure two at a discount? It’s like buying in bulk but for insurance! These policies tend to be less expensive than their single-insured counterparts since they cover two lives and the insurance company bets on the probability of both insured parties living longer.
Easier Access
Eased underwriting criteria make these policies the VIP backdoor pass compared to the bouncer-heavy entrance of single-insured life insurance. If one or both parties might not qualify individually due to health concerns, this more lenient policy could be the ticket.
Estate Building and Preservation
Beyond just a safety net, this insurance type is pitched as a tool for estate enhancement. It allows the estate to retain more value for beneficiaries by contributing a hefty death benefit, and it provides liquidity to manage estate taxes after both parties have left the stage.
Related Terms
- Whole Life Insurance: A life insurance type with a fixed premium and a guaranteed death benefit, plus cash value accumulation.
- Term Life Insurance: Insurance coverage at a fixed rate of payments for a limited period.
- Universal Life Insurance: A flexible premium, adjustable benefit life insurance that builds cash value.
- Estate Planning: The preparation of tasks that serve to manage an individual’s asset base in the event of their incapacitation or death.
Suggested Books for Further Studies
- “Life Insurance 101: From Term Life to Whole Life—Understanding the Basics” - A beginner’s guide through the various forms of life insurance.
- “Investing the Premiums: How to Expand Your Estate with Variable Life Insurance” - An exploration into the investment strategies within variable life insurance policies.
So, if you’re ready to gamble on the market while safeguarding your loved ones’ financial future, Variable Survivorship Life Insurance might just be the winning ticket you’ve been waiting for—because nothing says romance like a joint insurance policy betting on who dies last!
