The proceeds can provide the liquid assets necessary to pay estate taxes, which can be especially useful if many of your assets are illiquid (such as real estate or a business you don't want to sell).

The proceeds can also "replace" the taxes your estate had to pay so that your heirs receive an inheritance that hasn't been eroded by the Internal Revenue Service.

It's perfect for two-earner couples. Usually, if one spouse dies, the other will make enough to keep the family going. But if both die, their children will be in big trouble. This is especially true if you have a child with lifetime special needs -- survivorship life insurance means that when neither of you is around to take care of him, there will be plenty of money available.

You may want to leave a large amount to charity without reducing your children's inheritance. Survivorship life is perfect for the "estate tax bypass" technique, where you leave all of your assets to charity at death so you have no taxable estate. The net effect is that the IRS gets nothing.

Finally, as more and more businesses develop buy-sell arrangements, survivorship life insurance also is helpful as an inexpensive way to fund these agreements by covering two executives. The business may have enough cash to redeem the stock upon one executive's death, but not both.