With Survivorship CompLife© (SCL):
- One permanent life insurance policy insures two lives, generally for less than the cost of two individual policies.
- Benefit is payable upon the second death.
- Proceeds can be used to preserve the value of an estate or business.
- Parents of children with special needs can be assured that the costs of special caregiving can continue to be met when both of them have passed on.
- One generation can preserve its hard-earned success for the benefit of the next generation.
Failure to make arrangements to pay the federal estate taxes that inevitably become due (after both partners in a marriage die) can be a costly oversight. As much as 55% of an estate may be used up by the taxes and costs that occur at the time.
Current law permits deferral of the estate tax until after the second death. When the second spouse dies, the beneficiaries have options.
- Liquidate part of the assets of the estate
- Borrow, using the value of the estate as collateral
“Necessity makes do,” as they say, but these are drastic measures. A much more practical solution will be available to beneficiaries if action is taken while both spouses are still alive.
The beneficiaries will be able to pay federal estate taxes and administrative costs with the proceeds of a “second-to-die” life insurance policy.
There are other situations in which “second-to-die” life insurance can provide the solution.
A business may still be able to function properly after the loss of one key person, but would need considerable extra cash upon the death of a second key person.
Parents of children with special care needs are in a similar situation. Necessary expenses may be met by just one living parent, but the need for funds would become critical at the time of the second parent’s death.
People who have a special interest in the future of a school, church, hospital, foundation, or other charity, often come in twos.
Couples who are charitably inclined can use SCL as a practical and affordable way to increase the impact of their charitable contributions without increasing their financial vulnerability during their lifetimes.
Their annual gift can be used to pay the premium and create an eventual endowment of sizable proportions. With proper planning, their estate will not owe gift or estate taxes when the benefit is paid to the charity after both donors have passed away.
An SCL policy assures that money will be available precisely when the need becomes most critical (upon the death of whichever partner, or parent, lives longer).
SCL is a practical and far-reaching gift. It allows a couple to maintain the cash they need for as long as either of them lives, and to provide financial impact far beyond their own lifetimes.
- Protection that can be continued for lifetime.
- Guaranteed minimum cash value
- Option to mix term insurance with permanent insurance
- Optional additional premiums and lump sums
- Eligible to receive dividends.
- Maximum amount: Policy size maximums based on underwriting and insurable interest limits.
- Total annual premium limits vary depending on policy size.
- Payable until the second death, but no later than age 121 of the younger insured.
- Whole life portion: Guaranteed level for the life of the contract.
- Additional Protection (term) portion: Subject to change annually depending on dividend scale.
Alternate Premium Payment Option
- Eligible dividends and/or partial surrender of additions may be used to pay the premium.
- Increase policy values
- Reduce premium payments
- Accumulate at interest
- Receive in cash
*Choosing an option other than increase policy values prior to converting all term insurance could result in a reduction of term protection. Dividends are not guaranteed.
Options Available If Premium Payments Are Missed
- Automatic Premium Loan (APL) supported by the cash value.
- Remain in force as a reduced paid-up whole life plan.
- Cash surrender.
- Most of the accumulated cash value is available for loan.
- Variable loan rate or fixed 8%.*
- With “Direct Recognition,” the percentage of cash value borrowed affects amount of dividend credited.
- Any outstanding loan and accrued interest balances are deducted from the policy proceeds upon surrender or death.
*In Arkansas, SCL policies will have 5%
Optional Policy Benefits
- Waiver of Premium available: Ages 20-59
- Death Waiver of Premium available: Ages 20-75
For costs and more complete information, contact a Northwestern Mutual representative.
Download Survivorship CompLife® Brochure