What is survivorship life insurance?

Survivorship life insurance is a type of joint life insurance policy designed to cover two people (usually spouses) instead of just one. It only pays a benefit after both policyholders pass away. That can be useful for some couples, but because this type of insurance only provides one benefit payout, it may not be appropriate for most others. When two partners rely on each other's income and family care contributions, each should generally have their own policy and name the other as beneficiary. However, there are situations where a single survivorship life insurance policy (and payout) may be helpful or even preferable. See how this type of lifelong coverage can support estate planning, charitable giving, business succession, and providing for dependents with special needs by learning about:

• How a survivorship life insurance policy works

• Situations where survivorship policies are typically used

• Cost considerations and optional riders

A survivorship policy is a form of joint life insurance

Here's how it works:

There are two types of joint life insurance policies. In a "first-to-die" policy, the life insurance company pays a benefit after the first insured person dies. "Second-to-die" policies are more commonly called survivorship policies, and the benefit is only paid out after the second (surviving) person passes away. For obvious reasons, these policies can't be used to provide income replacement for a surviving spouse or help fund their retirement;¹ instead, the payout must go to the couple's beneficiaries. So it’s important to note that if providing financial support for a surviving partner is a priority (for example, by covering mortgage payments, medical bills, or even funeral costs), separate policies may be more appropriate.

You should also know that the beneficiaries of a survivorship policy don't have to be the couple's children or relatives. This type of policy can also be used to simplify the transfer of assets to a non-relative, such as a friend or business associate. For that matter, the beneficiary doesn't even have to be a person — the payout can be used to leave a legacy for a favorite charity or religious organization, or to fund a family trust. That's why these types of policies are often used for estate planning strategies.

Second-to-die coverage is typically purchased with a permanent whole or universal life policy instead of term life insurance. The reason is simple: most of the couples buying a survivorship policy don't want temporary protection. If the policy term ends before both partners die, there's no death benefit. Permanent life insurance also builds cash value which can be drawn on if needed.^2,3 That's why many life insurance companies, including Guardian, don't offer a term life insurance option for survivorship coverage. However, Guardian does offer a permanent joint life insurance: EstateGuard® — a first-to-die whole life insurance option.

Situations where a survivorship policy can be useful

• Estate planning strategies: Survivorship life insurance is often used by high net worth couples who want to lessen the tax burden for their children after they die. A surviving spouse doesn't have to pay taxes after the first spouse dies. However, if their resulting assets exceed the federal exemption level (set at $13.99 million for 2026), then federal estate taxes — which can run as high as 40% — must be paid after the second spouse dies.⁴ Currently, 12 states and the District of Columbia impose estate taxes, and five have inheritance taxes.⁵ A survivorship policy can help provide immediate cash flow to pay estate taxes and/or inheritance taxes, as well as final expenses and related costs once both spouses die. This financial protection for beneficiaries can be especially valuable for high-net-worth families seeking to manage tax burdens and provide financial security for heirs. It can also help equalize the distribution of assets among heirs, especially when assets (like a family business) can't be easily sold. Before buying insurance or other financial products for this purpose — and to fully understand the tax implications of survivorship life insurance — you should consult with a personal finance professional and tax professional who can provide appropriate tax and investment guidance.

• Business succession planning strategies: Survivorship policy owners can be any two people, including business partners. That means a survivorship policy can provide the liquidity needed to transfer business ownership if both partners die. Or, the death benefit can be divided among the partners' heirs to help ensure they are financially prepared to take over the business.

• Special-needs planning strategies: Survivorship insurance helps parents who have a special-needs child (or children) ensure their offspring will be taken care of after they die. Survivorship policies are sometimes used to fund a trust to provide ongoing financial support and security for their special needs children.

• Medical issues workaround: A survivorship policy can be a more cost-effective way to get coverage in situations where one spouse is in good health but the other cannot qualify for an individual life insurance policy due to health issues.

• Charitable giving: A survivorship life policy can be set up to leave a legacy to a specific charity upon the death of both policyholders. The flexibility of universal life can make it valuable for this use. It allows you to grow tax-deferred cash value that can still be accessed, as well as raise or reduce your premiums as needed.⁶ These policies can also provide a legacy for charitable beneficiaries.

Policy cost and options to consider

Generally speaking, it costs more to buy two individual $1,000,000 policies than to get a single survivorship policy for $1,000,000. The reason is clear: With two individual permanent policies, insurance companies must plan for a $2,000,000 payout; but when a single life insurance policy covers two individuals, the total payout is only half as large. Joint life expectancy is also longer than individual life expectancy (because typically, one insured dies sometime after the other), so second-to-die policies may be more cost-efficient than first-to-die policies. However, if your primary goal is to replace income for a limited period (for example, while your children are still living at home), a term policy is typically a more cost-effective solution than permanent or survivorship policies. But as with any life insurance, the actual policy cost can vary widely based on a number of factors, including age, health, lifestyle, type of insurance, and the insurance provider.

Guardian and other insurers also offer riders — optional features — to tailor each policy to the policyholders' specific needs.⁷ Some examples include:

• Estate Preservation Riders: These are used in certain tax planning circumstances that may require extra death benefits in the first years of the policy.

• Level Term Rider: Offers extra coverage on each insured until age 95. The rider, which must be applied for individually by each insured, can usually be converted to a whole life coverage if done before a set age limit.

• Waiver of Monthly Deduction for Death and Disability: This benefit, which is only applicable to one of the insureds, can help ensure the policy will remain active by waiving premiums if the couple's income is reduced due to death or disability.

How to buy a survivorship life insurance policy

You should start by discussing, as a couple, whether a joint life insurance policy — with a single death benefit — is the best option for your needs. One way to find out more is by looking at other life insurance policies and coverage options, such as trying a term life calculator and quote tool from an insurance company like Guardian. If you and your spouse or partner are still interested at that point, we suggest talking to a knowledgeable financial advisor who can answer your questions and customize a survivorship life insurance policy as part of a comprehensive financial plan tailored to your long-term goals. If you don't have someone to discuss insurance with, Guardian can help you find a nearby financial advisor who will take the time to learn about your situation and present you and your partner with options that fit both your needs.