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Simple English definitions for legal terms
survivorship policy
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A quick definition of survivorship policy:
A survivorship policy is a type of insurance policy that pays out after all the people insured have died. It's like a joint life policy, but instead of paying out when one person dies, it pays out when everyone has died. Insurance policies are contracts that protect you from financial loss if something bad happens, like a car accident or a fire. There are many different types of insurance policies, each with their own rules and coverage. Insurance companies use a process called rating to determine how much you should pay for your policy, and the amount you pay is called the premium.A more thorough explanation:
A survivorship policy is a type of insurance policy that is payable only after all the insured individuals have died. It is also known as a joint life policy. This policy is commonly used by couples to ensure that their beneficiaries receive the death benefit only after both of them have passed away.
For example, John and Jane purchase a survivorship policy. The policy will pay out only after both John and Jane have died. If John dies first, the policy will not pay out until Jane also passes away.
Survivorship policies are often used in estate planning to provide funds for estate taxes or to leave a legacy for beneficiaries. They can also be less expensive than individual life insurance policies because the risk is spread over multiple individuals.