Last to die life insurance policies have become much more attractive in recent years because of their relatively low cost when compared to other life insurance plans. This plan allows a person to receive a pay out upon the death of their spouse. One major drawback of these last to die insurance policies is that the premium expense must be paid even after the death of the spouse. But compared to other policies, they can be easier to obtain, especially if one person has medical impairments.
This is a policy where two people, a husband and wife, are insured under one policy. For some companies, the minimum amount of insurance is $50,000, and the size of the estate must be $2,000,000 or greater because of how the tax laws are set up. The premiums are inexpensive because the insurance is only paid at the second death, normally to pay the estate tax. This allows the company to be more lenient on the terms offered the insured. The policy allows the couple to begin payments early and make small payments over many years. The survivor with the last to die life insurance policy will receive a cash payout that will cover funeral expenses, bills, and other expenses that may arise. The final payout is a tax-free benefit for the survivors. In the event of the death of the second spouse, the children or heirs of the estate will also receive some benefits from the plan.
One of the negative aspects is the premium expense that must be paid after the death of the first member. While there is a payout for last to die insurance, it is sometimes just enough to cover funeral expenses and estate taxes. So before any couple pursues this type of policy, they must sit down and figure out what will happen if one of them dies. That means determining the income sources for the surviving husband and for the surviving wife. If either person will not have enough income to continue the last to die life insurance policy, then the policy will lapse, and the paid premiums will go to waste. At that point, the couple may be better advised to find a different plan for their protection than last to die insurance.
Death is something that all people should take very seriously and prepare for with great care and concern. The greatest protection that we can find is through belief in Jesus Christ. "Verily, verily, I say unto you, He that believeth on me hath everlasting life" (John 6:47). No matter how we prepare, our lives here are a short vapor, and then we enter eternity. How we can praise God that our future is taken care of through Jesus. We don't need last to die life insurance there, because there is no more death.
For more information: http://www.christianet.com/lifeinsurance
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