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Aviva offers survivorship life insurance offering

By Maryalene LaPonsie on March 21st, 2012

While life insurance policies commonly provide coverage for only one person, the latest product from Aviva - dubbed Survivorship Builder - allows two people to be covered by the same plan.

"Life insurance for two persons in one policy - with the availability of a death benefit paid out at both the first and second death - is what sets Survivorship Builder apart," said Chuck Van Devander, Aviva USA's senior vice president of distribution services, in a press statement.

The life insurance company contends its Survivorship Builder product is ideal for small businesses, blended families or those who are concerned with potential changes in estate tax laws.

Survivorship life insurance basics

Also known as dual-life insurance or second-to-die insurance, survivorship policies aren't new. Many companies have offered them for years and market them mainly to those wishing to minimize the impact of estate taxes on their heirs.

According to New York Life, survivorship policies offer the following benefits:

  • A simple way to provide money to heirs to offset estate taxes
  • Elimination of the need to plan based upon who may die first
  • More affordable life insurance than if two single policies are purchased
  • More liberal underwriting than what may be used for single policies

In addition to estate planning, New York Life says survivorship policies may be an appropriate way to fund a trust for a special needs child or make a charitable donation.

First-to-die rider from Aviva

Survivorship life insurance policies generally pay a death benefit only after both covered individuals die. Aviva says its Survivorship Builder policy is different in that it allows for an optional first-to-die rider.

For policies with the rider, a portion of the death benefit is paid out when the first individual dies. The payment goes to the other individual covered by the policy. When the second individual dies, the remaining death benefit is paid to the policy's beneficiary.

According to Aviva, the first-to-die rider may be particularly appropriate for those in blended families or small businesses. The rider provides the remaining insured individual with money that can be used to take care of final expenses or other costs while preserving a benefit for beneficiaries.

Not available as term life, the Survivorship Builder policy is offered as universal life insurance. As a form of permanent life insurance, universal plans may offer more flexibility than whole life in terms of premium payments. However, consumers should carefully review the provisions of any life insurance policy to evaluate both its benefits and risks before purchasing the plan.

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