Divorce can be very stressful. After years or decades of living with your spouse, you are now forced to divide all of your personal belongings and financial assets. Among the financial assets you need to consider is your life insurance policy, which can be affected by your divorce and should be reviewed after your divorce is finalized.
A Life Insurance Policy Can Be Divided During Divorce
Some life insurance policies, such as universal life and whole life policies, have a cash value. If your policy has a cash value, chances are it will get listed as a divisible asset in your divorce.
If this policy does get split in a divorce, it’s possible for one spouse to take the cash value while the other keeps the remaining policy and coverage in the other spouse’s name. Keep in mind that whatever cash value is taken from the policy during your divorce will be subtracted from the death benefit.
Reconsider Your Beneficiaries
If your ex-spouse was the primary beneficiary on your life insurance policy, chances are you’ll want to change this for obvious reasons. A less obvious reason for re-designating your beneficiaries, though, is that some states prohibit insurance companies from paying life insurance benefits to ex-spouses unless doing so is required by their divorce decree.
If you wish to change your beneficiaries, doing so can be relatively easiy. You’ll probably need to fill out a form and send it to your insurance company or you may be able to designate new beneficiaries online. It can be difficult to decide who you want your life insurance policy to pay out to when the time comes, but many people choose their new partners, children, siblings, or even their nieces and nephews if they don’t have children of their own.
You May Be Required to Carry Life Insurance
If you don’t already have a life insurance policy, the court may require you, your spouse, or both of you to carry one. Having a life insurance policy in place can ensure that there will be money for child support and spousal support payments not paid during someone’s lifetime if they die before these orders expire.
If you’re looking for a life insurance policy after your divorce, turn to the specialists at Insurance Specialists, Inc. for help. After learning more about your situation and needs, we can offer quotes on policies that can help you protect your loved ones.
For more information, reach out to Insurance Specialists, Inc. online.