 A second-to-die life insurance policy pays benefits when the second of two people (usually a spouse) dies. Today, the primary purpose of such a policy is to provide cash to pay taxes if you have an extremely valuable illiquid asset, such as a business, worth millions of dollars.  

With the new $5 million per person exemption in place for the next 2 years, 99% of estates will not be subject to the federal estate tax and, therefore, you would be insuring for a tax that (likely) will not apply.   

. Answers to our readers' questions were provided by 

 editiorial consultant David J. Schiller, Schiller Law Associates, Norristown, Pennsylvania.

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Learn whether it's worthwhile to obtain a second-to-die insurance policy for estate tax purposes.