Survivorship Universal Life Insurance (SUL)
Typically, two people have covered in survivorship universal life (SUL) insurance, and the policy pays a benefit to a beneficiary only after both persons have passed away. The advantage of this policy is its lesser cost of obtaining when compared to obtaining two individual permanent policies, and it even provides a larger benefit for your beneficiaries.
This insurance plan pays a death benefit to a beneficiary or beneficiaries, only after the death of the two people who are the insured in the policy. Therefore, no benefit is paid when the first policyholder dies and the premium is still continued in payment by the second holder of the policy.
The guaranteed life insurance enables the build-up of tax-deferred cash value which can be accessed for a variety of personal needs.
A vital feature of the survivorship universal life insurance is its flexible premiums which can be raised or lowered, depending on how your needs change or your current financial situation.
Affordability is also a built in feature of the policy, simply because the policy pays only after two people have passed on, making it a lot cheaper than individual whole term life insurance.
Your death benefit also enjoys a no tax deduction, even if it is so large, it is simply passed to your beneficiaries tax-free!
Applications and benefits of the Survivorship Universal Life Insurance
The survivorship universal life policy finds its crucial application and benefits in planning for the following needs:
- Charitable Giving: This insurance plan is perfect for charity giving, most especially if you wish to leave a legacy to a certain charity organization or setup, survivorship universal life insurance truly enables you to achieve this.
- Business Transitions and Planning: Survivorship universal life insurance ensures that the funds required for an orderly and smooth transfer of the ownership of a business is provided. And also, in case you have a family-owned business, it makes provision for heirs who are not interested in the business and allows those who are interested in continuing the business do so.
- Special-needs Trust: If you have anyone requiring an extended care, and you are worried of what can happen to them after you are gone, the survivorship universal life insurance can supply the funds required to pay for their expenses.
- Estate Planning: In the period of retirement, many people spend a part of their assets, however with survivorship universal life policy, death benefit are provided after you are gone to your beneficiaries and these benefits are tax-free. These benefit could be used to help counterbalance estate taxes, helping you to protect your estate even after you are gone.