Directly, no. Indirectly, yes. Your estate tax can only be reduced by reducing your taxable estate (i.e., gifts, family limited partnerships, etc.). However, if properly arranged, a survivorship life policy will be tax free to the beneficiary, no estate tax and no income tax. If, for example, you only pay over time $200,000 of premiums into a $1,000,000 policy, you’ve effectively paid $1,000,000 of estate tax for $200,000! Twenty cents on the dollar! This is much better than buying no insurance and paying $1,000,000 of your assets for $1,000,000 of tax!