Insurance to Leave a Legacy

By November 1, 2013March 1st, 2014No Comments

Many people purchase term life insurance to help protect their families when their children are young and dependent on them for support. By definition, term policies have ending dates, and it’s not unusual to allow a term policy to lapse without obtaining replacement coverage after children leave home and can support themselves.

Even if you do not need life insurance to replace lost income for your dependents, you may want insurance for other purposes, such as paying final expenses or leaving a legacy. For these needs, you might consider a survivorship life insurance policy.

A Cost-Effective Approach

Also called second-to-die insurance, a survivorship life insurance policy insures two people and pays a benefit after the death of the second insured person. The premiums are usually less expensive than premiums for a single-life policy because they are based on the life expectancies of both insured individuals. This can be especially helpful later in life, when an individual life insurance policy may be more expensive or difficult to obtain. Survivorship policies can also be used to insure business partners, and options may be available to insure more than two people, if appropriate.


Survivorship life insurance is often used to pay estate taxes, which typically do not become an issue until estate assets pass to nonspouse heirs. Fewer estates may be subject to federal estate taxes now that the higher exemption amount ($5.25 million in 2013) has been made permanent by the American Taxpayer Relief Act of 2012. However, heirs often face other expenses in settling an estate, including probate and state estate taxes, which typically have lower exemption levels than federal estate taxes. The death benefit from a survivorship life insurance policy can help pay these expenses without requiring heirs to sell assets or dip into their inheritances.

As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications. The cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable.

The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2014 Emerald Connect, LLC
© Mahoney Asset Management

Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money. Before investing, consider the funds’ investment objectives, risks, charges, and expenses. Contact Mahoney Asset Management for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

This web site has been prepared solely for informational purposes. It is not an offer to buy or sell any security; nor is it a solicitation of an offer to buy or sell any security.This site and the opinions and information therein are based on sources which we believe to be dependable, but we can not guarantee the accuracy of such information.

Representatives of a broker-dealer or investment adviser may only conduct business in a state if the representatives and the broker-dealer or investment adviser they represent: (a) satisfy the qualification requirements of, and are approved to do business by, the state; or (b) are excluded or exempted from the state’s licenser requirements.

An investor may obtain information concerning a broker-dealer, an investment advisor, or a representative of a broker-dealer or an investment advisor, including their licenser status and disciplinary history, by contacting the investor’s state securities law administrator.

This information is intended for use only by residents of CA, CT, DC, FL,, MA, MD, MN, NC, NJ, NY, OH, PA, and VA. Securities-related services may not be provided to individuals residing in any state not listed above.

The financial calculator results shown represent analysis and estimates based on the assumptions you have provided, but they do not reflect all relevant elements of your personal situation. The actual effects of your financial decisions may vary significantly from these estimates–so these estimates should not be regarded as predictions, advice, or recommendations. Mahoney Asset Managment does not provide legal or tax advice. Be sure to consult with your own tax and legal advisors before taking any action that would have tax consequences.

Securities offered through
Newbridge Securities Corporation,
member FINRA / SIPC

Investment Advisory Services offered through
Newbridge Financial Services Group Inc.,
an SEC Registered Investment Adviser.

Office of Supervisory Jurisdiction
1200 North Federal Highway, Suite 400
Boca Raton, FL 33432

Toll-Free: 877-447-9625
Phone: 954-334-3450
Fax: 954-489-2390