A survivor purchase option (SPO) is a rider to a life insurance policy that allows the designated beneficiary to receive the death benefit as cash or apply as much of it as desired to the purchase of a new life insurance policy for themselves. The added benefit is that the cost and underwriting of the latter is based on the health of the beneficiary at the time of the original policy's purchase.
In practice, the survivor purchase option appeals to both individuals and businesses. In case of the former, it allows beneficiaries a way to address estate tax issues now or later on, and for the latter, some companies have found it suitable for business continuity.
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