Survivorship
Life Insurance
What is it?
Survivorship
Life is a second-to-die life insurance policy. (USLIP)
Second-to-die coverage
is for two persons (usually husband and wife). The death benefit of a second-to-die
policy is not payable until both people covered by the policy die.
Second-to-die
coverage is used primarily in estate planning. It protects children and other
heirs from the burden of estate taxes, which often become due and payable nine
months after the date of the second insured's death.
Tax advisers and estate
planners routinely recommend second-to-die coverage as a way to pay estate taxes
and other costs associated with settling a large estate.
Interest
sensitivity and cash value build-up
Premiums paid into your Survivorship
Life policy will earn interest at a competitive rate, guaranteed never to be less
than 3%. Your policy can develop available cash value, which can be used by you
for other purposes, if needed.
Premium flexibility
Subject to the initial minimum premium requirements described
in the policy, you can pay whatever premium you wish. Any premium you pay over
and above the minimum can result in an even larger build-up of the policy's cash
value, or enable you to reduce future premiums.
Disability
of premium waiver
This rider to your Survivorship Life policy
can waive the policy's monthly deduction in the event of disability. It can cover
one or both insureds. (USLIPDW)
Coverage flexibility
The amount of protection in your Survivorship Life policy can
be increased at any time, subject to the insurability of the two insureds. Additional
premium may or may not be necessary. A reduction in the policy's amount of coverage
can occur, once the policy develops a positive surrender value.
Proceeds
from a life insurance policy paid because of death of the insured are generally
excludable from the beneficiary's gross income for tax purposes.
Riders
Automatic
Increase Rider. Your estate is likely to grow in value. When it does, your
need for additional coverage will grow as well. By including the Automatic Increase
Rider with your policy, your coverage can automatically increase every year and
eventually grow to as much as twice the original amount of coverage. (Form
USAIR)
Contemplation of Death Rider. Maybe your estate plans
are not complete, but you're in the process of finalizing them. This special optional
rider enables you to get the necessary coverage in place now, including
some important additional temporary protection. (Form USLIPCD)
Proceeds
from an insurance policy paid because of the death of an insured are generally
excludable from the beneficiary's gross income for tax purposes. (IRC Sec. 101(a)(1).)
Income
and growth on accumulated cash values have been held by the Tax Court to be generally
taxable only upon withdrawal. (IRC Sec. 72.). Consult your tax adivser or attorney
on your specific situation.
Policy
death proceeds can be arranged to be tax-free (IRC Sect. 2042)
American National Insurance
Company, Galveston, TX
American National Property and Casualty Company,
Springfield, MO
These
brief descriptions of coverages available are for illustrative purposes
only, and are not intended as a statement of contract. For actual terms
and conditions of coverage provided, refer to your insurance policy,
or, for more information about coverage options and availability, talk
to your American National agent. All products, coverages, and options
are not available in all states, and eligibility guidelines apply. American
National Family of Companies reserves the right to discontinue programs
at any time.
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