What do you need to know about getting a divorce and your life insurance policy? Going through a divorce can be an emotionally charged period in your life, especially if children are involved.
Sometimes divorce settlement negotiations are difficult, so it's important that you are prepared.
One of the first things you may want to do is make sure your life insurance company is aware of your situation.
No one will tell them unless you do.
If you don't change your beneficiary, your ex-spouse may receive the money from your life insurance policy when you die.
You may be able to transfer ownership rights of your life insurance policy as part of a property settlement or to guarantee alimony and/or child support payments.
In some cases, alimony and/or child support is ordered by the court for a specific amount of time, for example, when your youngest child turns 18.
If this is the case, then you may want to purchase a term life insurance policy that only stays in effect until the court ordered payments have ended.
A term life insurance policy will pay benefits to your beneficiary to compensate for any lost alimony or child support should you have a premature death.
Once the policy and Court ordered financial obligations are met, you may want to transfer the term life insurance policy into a permanent life insurance policy.
At that time, you may want to change your named beneficiary as well.
When in divorce negotiations regarding your life insurance policy, it's important to agree on who will be the owner of the life insurance policy.
This is a vital factor because the owner of a life insurance policy controls who the policy and who is the named beneficiary.
A good way to guarantee that the life insurance policy is maintained as agreed upon in the divorce judgment is to name the custodial parent of any minor children as the owner of the policy.
You can also have included in your divorce judgment that if the life insurance policy is allowed to lapse or if the beneficiary is changed from that previous agreed upon, that you or your children are entitled to part of you ex-spouses estate equal in value to the death benefits the life insurance policy would have paid.
A life insurance policy may also be a good way to fairly compensate any children you have from a previous marriage.
If you're paying alimony to your ex-spouse and have a second family with your new mate, adult children from your first marriage may choose to sue your estate if they are not dealt with fairly.
A permanent life insurance policy can be an immediate remedy to avoid this potential problem.
If you buy a permanent life insurance policy and designate your adult children from a previous marriage as the named beneficiaries, when you die, those children will get the death benefits.
If you've remarried, the spouse and any children from that marriage will get your accumulated property and assets in the event of your death.
Therefore you've provided for both families.
A divorce is a life altering experience, and therefore, it is vital that you plan carefully to meet the financial and legal obligations you may have to cushion the blow of a divorce.
Be sure that you are not paying more for life insurance coverage than you need to.
Shop around and compare quotes from at least 3 different companies in order to find the coverage for the best price.
Sometimes divorce settlement negotiations are difficult, so it's important that you are prepared.
One of the first things you may want to do is make sure your life insurance company is aware of your situation.
No one will tell them unless you do.
If you don't change your beneficiary, your ex-spouse may receive the money from your life insurance policy when you die.
You may be able to transfer ownership rights of your life insurance policy as part of a property settlement or to guarantee alimony and/or child support payments.
In some cases, alimony and/or child support is ordered by the court for a specific amount of time, for example, when your youngest child turns 18.
If this is the case, then you may want to purchase a term life insurance policy that only stays in effect until the court ordered payments have ended.
A term life insurance policy will pay benefits to your beneficiary to compensate for any lost alimony or child support should you have a premature death.
Once the policy and Court ordered financial obligations are met, you may want to transfer the term life insurance policy into a permanent life insurance policy.
At that time, you may want to change your named beneficiary as well.
When in divorce negotiations regarding your life insurance policy, it's important to agree on who will be the owner of the life insurance policy.
This is a vital factor because the owner of a life insurance policy controls who the policy and who is the named beneficiary.
A good way to guarantee that the life insurance policy is maintained as agreed upon in the divorce judgment is to name the custodial parent of any minor children as the owner of the policy.
You can also have included in your divorce judgment that if the life insurance policy is allowed to lapse or if the beneficiary is changed from that previous agreed upon, that you or your children are entitled to part of you ex-spouses estate equal in value to the death benefits the life insurance policy would have paid.
A life insurance policy may also be a good way to fairly compensate any children you have from a previous marriage.
If you're paying alimony to your ex-spouse and have a second family with your new mate, adult children from your first marriage may choose to sue your estate if they are not dealt with fairly.
A permanent life insurance policy can be an immediate remedy to avoid this potential problem.
If you buy a permanent life insurance policy and designate your adult children from a previous marriage as the named beneficiaries, when you die, those children will get the death benefits.
If you've remarried, the spouse and any children from that marriage will get your accumulated property and assets in the event of your death.
Therefore you've provided for both families.
A divorce is a life altering experience, and therefore, it is vital that you plan carefully to meet the financial and legal obligations you may have to cushion the blow of a divorce.
Be sure that you are not paying more for life insurance coverage than you need to.
Shop around and compare quotes from at least 3 different companies in order to find the coverage for the best price.
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