What key benefit does a second-to-die policy offer in estate planning?

A second-to-die policy, often used in estate planning, provides a payout after both insured individuals have passed away. This type of policy is designed primarily for couples—typically spouses—where the benefit is not triggered until the death of the second insured person. The key advantage of this arrangement is that it can help cover estate taxes or provide cash for the heirs, ensuring that the estate can be settled without forcing a sale of assets to meet tax obligations.

In this way, a second-to-die policy can be part of a strategic financial plan, allowing families to preserve wealth and simplify the distribution of assets after both individuals have passed. This contrasts with policies that provide immediate payouts upon the death of the first insured, which do not serve the specific estate planning purpose that a second-to-die policy does. Additionally, while second-to-die policies may offer coverage for an individual's lifetime at lower premiums and may incorporate flexible premium payments, the central feature is primarily the timing of the policy's payout.