Taking out a life insurance cover is an investment, and just like it is the case with other investments, there are a number of factors to consider to ensure that you get the highest return possible. The story is the same when buying a Second to Die insurance cover. You want to make sure that your dependents will be getting all the benefits that come with it. This policy ensures not only the financial security of your children but also the retention of the family estate when both you and your spouse have passed on. It is most certainly a safety net worth considering.
Find a good insurance company
The first thing to get right is the policy provider. You want to ensure that the insurance company offering the cover is the best. The first thing to look for is the reputation of the company, both the past and the present. How have they handled such policies before? And if you can get their past and present clients, even better. The last thing you want is to waste your time and investment on a company that would possibly be out of business in the next few years.
Get a Competent trustee
When you choose to use a trust to manage the policy and later the benefits, it is of grave importance that you find yourself a competent and qualified trustee. There have been cases where the funds from the second to die policy have been mishandled due to the irresponsibility of the trustee. It will be the task of the trustee to make sure that the policy remains in force, and that the distribution of the benefit is in accordance with your specifications. It would be best to keep the policy out of the estate.
What is the value of your assets?
The assets you have will determine whether running the trust will be worth it. Ensure that the assets will be enough to pay for the management of the trust besides creating it. Also, if the premiums are paid using the assets, then you have to ensure that there is enough of the same. If not, you may want to find other ways of financing the trust or the cover altogether.
Are you able to finance the cover to the end?
The other thing that many people overlook is the ability to finance the cover to the end. End here means until the death of the second to die. What measures have you put in place to help with the payment of the premiums? You probably know that once you have completed the agreement on the policy in terms of the premiums to be paid; you cannot alter anything. Therefore, make sure that you have a plan, and that the last surviving spouse will be able to finance the policy.
The insurance company will not allow you to change your mind and get the money back just because you can no longer pay the premiums. Worse yet, you may end up losing everything.