Life Insurance On Ex-Spouse
Life insurance for newly married couples is the best option for spouses that wish to get life insurance policies. It is very popular amongst couples as getting this policy usually means lowering the price and protecting your assets.
This kind of insurance is also called joint policy, and it is not as common as individual life insurance, but it is usually cheaper. This way you deal with only one set of papers, which makes life insurance for couples easier and affordable.
While taking joint policy, nobody thinks about what happens to it if marriage comes to an end. Sorting out the policy after divorce can be really confusing and complicated as life insurance is usually connected to your spouse. This can have a great impact on your finances, and that is why it is so important to understand how it works.
What will happen to my life insurance after divorce?
If you have a joint policy, it is most probably that you listed your spouse as beneficiary. If that is the case make sure your policy is fixed the way you want it before you two finalize the divorce.
When it comes to life insurance on ex spouse, you may wish to change the person to whom a payout would be made if something should happen to you. Now when the situation is different, you will need to make some changes that will more refer to your current situation.
What happens with life insurance on ex spouse when children are in the picture?
In this case, all the questions will concern how to ensure the future alimony and child support payments.
Even though you had a joint policy, divorce changes a lot of legal things and you cannot expect that you will receive alimony and/or child support after your divorce, if your ex-spouse dies. In this situation, that money will stop. That is why it is often advised to use an existing policy or to buy a brand new one and set up a life insurance on ex spouse. In this case, if the policy is large enough, it could even replace the money for alimony or child support payments.
If you choose to do so, make sure you pay the premiums yourself. This way you will be sure that the payments are on time. Also, make sure you’re the owner of the policy before you finalize your divorce. The policy could also be signed over to you during the divorce proceedings as a part of your divorce agreement.
Should I get any professional help?
Finding good life insurance can be complicated. If all these confuse you, consult your attorney or financial advisor. They will help you understand more, they will check if all the paperwork is there, and help you choose the best options in order to protect yourself and your children.
If you are going through a divorce, resolving your joint life insurance policy is probably not something that will be high on your list, even if it should. First, because it is very important to explore all the options you have before you actually get divorced. Second, because you should make plans for your financial future, especially when you are going through a divorce where children are involved.