Survivorship life insurance

A survivorship life insurance policy is a type of joint life insurance that covers two people and only pays out the death benefit when both parties have died.

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Tory CrowleyAssociate Editor & Licensed Life Insurance AgentTory Crowley is an associate editor and a former licensed insurance agent at Policygenius. Previously, she worked directly with clients at Policygenius, advising nearly 3,000 of them on life insurance options. She has also worked at the Daily News and various nonprofit organizations.&Katherine MurbachEditor & Licensed Life Insurance AgentKatherine Murbach is an editor and a former licensed life insurance agent at Policygenius. Previously, she wrote about life and disability insurance for 1752 Financial, and advised over 1,500 clients on their life insurance policies as a sales associate.

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Antonio Ruiz-CamachoAntonio Ruiz-CamachoAssociate Content DirectorAntonio helps lead our life insurance and disability insurance editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.
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Maria FilindrasMaria FilindrasFinancial AdvisorMaria Filindras is a financial advisor, a licensed Life & Health insurance agent in California, and a member of the Financial Review Council at Policygenius.

Updated|3 min read

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What is survivorship life insurance?

Survivorship life insurance is the most popular type of joint life insurance — which insures two people instead of one. Survivorship life insurance only pays the death benefit to the beneficiary after both insured people have died. It’s best used by high-net-worth individuals for estate planning purposes.

The majority of joint life insurance policies are permanent life insurance, meaning they don’t expire as long as you continue to pay the premiums.

Key Takeaways

  • Survivorship life insurance is a type of joint life insurance policy, which provides coverage for two people instead of one.

  • Couples with specific estate planning needs or parents of children with disabilities benefit most from survivorship life insurance.

  • Most couples are better served by separate term life insurance policies.

How does survivorship life insurance work?

When a couple — usually two spouses — applies for life insurance, both people go through the application process together to receive their policy.

But unlike traditional life insurance that covers a single policyholder, a survivorship policy doesn’t pay out after the first person dies. Instead, the remaining policyholder continues to pay the premiums until they pass away. Then, the beneficiaries will receive the policy’s full death benefit once both parties die.

This makes survivorship policies less useful if your goal is to provide your loved ones financial support after one person’s death. This type of policy is usually bought to protect the financial health of future generations.

Since survivorship life insurance policies are permanent, they also come with a cash value component in addition to the death benefit, which acts as a tax-deferred savings vehicle. Unlike the death benefit, you can access the cash value of a policy while you’re still alive.

What are the different types of survivorship life insurance?

Common types of survivorship life insurance include:

  • Whole life insurance, one of the most popular types of permanent life insurance. Whole life policies come with fixed premiums, a guaranteed death benefit, and cash value that grows at an interest rate set by the insurer.

  • Universal life insurance, which offers more flexibility with your cash value, premiums, and death benefit. With universal life policies, you can often use your cash value to pay your premiums. In some types of universal life policies, the cash value growth is tied to a market index, so you take on more investment risk.

Learn more about the differences between whole and indexed universal life insurance (IUL)

What’s the difference between joint life and survivorship life insurance?

Survivorship life insurance is one of two types of joint life insurance.

  • A first-to-die life insurance policy pays out the death benefit when the first of the two spouses passes away.

  • A survivorship life insurance policy pays out the death benefit only after both policyholders die. Survivorship policies are also called second-to-die life insurance for this reason.

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Pros of survivorship life insurance

There are a few major reasons you might purchase a survivorship life insurance policy:

  1. It can provide care for lifelong dependents. If you and your spouse have a dependent who will always rely on you, such as a child with disabilities, a survivorship life insurance policy ensures that you’re leaving money behind so they can be taken care of for the rest of their life. The policy could be funded into a special needs trust for the dependent to have some income if both parents are no longer around to support them.

  2. It’s useful for estate planning. If you want to leave money or assets behind to heirs or minimize estate taxes, survivorship life insurance is a good option. The policy’s main purpose is to maximize your estate and provide liquidity — but it’s helpful to consult with an estate planning attorney if you’re considering this route.

  3. It’s cheaper than two permanent policies. Purchasing an individual permanent life insurance policy is much more expensive than purchasing other types of life insurance, such as a term life insurance policy. But permanent survivorship life insurance policies can sometimes be less expensive in the long run than buying two separate permanent policies.

  4. It may help if you have a partner with serious health conditions. If a couple wants both partners to have insurance coverage but one of them doesn’t qualify for their own policy due to their health, a joint policy can cover them both under a single policy.

  5. You can use the cash value. Though the death benefit won’t pay out until both policyholders have died, many permanent policies can build up a cash value that can be accessed while one of the spouses is still alive. If the policy builds enough cash value, the surviving spouse can withdraw money while the policy is still active.

→ Learn more about how cash value life insurance works

Cons of survivorship life insurance

  1. Survivorship policies are costly. Since survivorship life insurance is permanent, it’s much more expensive than other types of life insurance.

  2. There’s a delayed death benefit payout. Your beneficiaries won’t receive the money until after both insureds have died, so if they’ll need financial support sooner, you may want to consider a different type of policy.

  3. Survivorship policies are difficult to split up in the event of a divorce. If you foresee your marital status changing, a survivorship policy could complicate divorce proceedings.

If you don’t have specific estate planning needs, you likely don’t need survivorship life insurance. Most couples can opt for individual term life insurance policies in order to provide an affordable financial safety net for their families, in case they die prematurely. 

Term life insurance is one of the most popular and affordable types of life insurance, meant to last for a set term during the period of your life where you have the most expenses — such as when you’re raising children, or paying off a mortgage.

Is a survivorship life insurance policy worth it?

A survivorship life insurance policy can be a good option if you plan to use life insurance as an estate planning tool for your loved ones, rather than as a financial safety net. Alternatively, if you or your spouse are in poor health and can’t get an affordable policy on your own, a survivorship life insurance policy can help both of you get some coverage.

A survivorship life insurance policy isn't the best choice for people in generally good health who need life insurance to protect their income if they die. In this scenario, most financial professionals would recommend term life insurance instead.

If you’re considering survivorship life insurance but aren’t sure if it’s the best fit for you and your family, you can consult with a financial planner and life insurance agent to review all of your options. At Policygenius, our experts are licensed in 50 states and can provide you with transparent, unbiased advice.

Frequently asked questions

What is a survivorship life insurance policy?

Survivorship life insurance is a type of joint life insurance in which the death benefit only pays out once both policyholders have died. Survivorship life insurance is also referred to as second-to-die life insurance.

How many people does a survivorship life insurance policy cover?

Two people who share financial interests — usually spouses or domestic partners — are covered under a survivorship life insurance policy.

How are survivorship life insurance policies helpful in estate planning?

A survivorship life insurance policy’s death benefit can be used by the policyholders’ heirs to pay estate or inheritance taxes.

Authors

Tory Crowley is an associate editor and a former licensed insurance agent at Policygenius. Previously, she worked directly with clients at Policygenius, advising nearly 3,000 of them on life insurance options. She has also worked at the Daily News and various nonprofit organizations.

Katherine Murbach is an editor and a former licensed life insurance agent at Policygenius. Previously, she wrote about life and disability insurance for 1752 Financial, and advised over 1,500 clients on their life insurance policies as a sales associate.

Editor

Antonio helps lead our life insurance and disability insurance editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.

Expert reviewer

Maria Filindras is a financial advisor, a licensed Life & Health insurance agent in California, and a member of the Financial Review Council at Policygenius.

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