Survivor Purchase Option

What Does Survivor Purchase Option Mean?

A survivor purchase option (SPO) is a rider attached to a life insurance policy that allows the designated beneficiary to receive the death benefit as cash or use part of it to purchase a new life insurance policy for themselves. The added benefit of an SPO is that the cost and underwriting of the new policy are based on the beneficiary’s health at the time the original policy was purchased.

Insuranceopedia Explains Survivor Purchase Option

In practice, the survivor purchase option appeals to both individuals and businesses. For individuals, it provides beneficiaries with a way to address estate tax issues either immediately or in the future. For businesses, some companies have found it useful for ensuring business continuity.