143 / Does the income taxation of a life insurance policy that insures more than one life differ from the taxation of a policy that insures a single life?

Basically, no.

Multiple-life policies may insure two or more lives. Typically, a “first-to-die” or “joint life” policy pays a death benefit at the death of the first insured person to die while a “second-to-die” or “survivorship” policy does not pay a death benefit until the death of the survivor. Estate planning and business continuation planning are two of the more common uses for these types of policies.

Generally, multiple-life policies are subject to the same definition of life insurance applicable to policies insuring a single life. One exception is that for purposes of calculating the net single premium under IRC Section 7702, multiple-life policies may not take advantage of the three safe harbor tests set forth in proposed regulations for meeting the reasonable mortality charge requirement ( Q 65).¹