Last Survivor - These products are useful in estate planning cases as a funding method to discount estate taxes or to increase the estate value that is passed on to the heirs.  The product is designed to pay the death benefit at the second death, which is typically when the largest part of the estate is transferred to the heirs.  The last survivor products can be significantly less costly than two individual policies.  This is due to the blended mortality costs as well as cutting the administrative expenses in half.  For estates that have assets of $1 million or more the ownership/beneficiary designation becomes extremely important if the policy benefit is to be kept out of the taxable estate.  The use of various trusts can give the client the desired control of the transfer of the estate assets as well as keeping the insurance out of the estate.  

Advantages - The Last survivor products provide the liquid assets for paying any transfer taxes.  These products can reduce the cost of insurance in cases where one of the insured's is medically impaired.  Some products will even take one uninsurable as long as the other is in good health.

Disadvantages - These products do not provide a survivor benefit as the first death unless a separate rider is used.

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Securities offered through Mutual Service Corporation. Mutual Service Corporation and LPL Financial are affiliated companies and are members of FINRA/SIPC. FINRA web site is www.FINRA.org.  Investment Advisory Services offered through Financial & Investment Management Advisors, Inc., an SEC Registered Investment Advisory Firm. Financial & Investment Management Advisors, Inc. is not affiliated with Mutual Service Corporation or LPL Financial.

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Last modified: June 17, 2008