If you are considering the importance of life insurance after divorce, or would like to know what changes with your life insurance after divorce this post will discuss both. Going through a divorce is a tough time both emotionally and financially. Because of all of the stress many people forget about their life insurance when discussing assets, or the protection which is still in place. Through a few simple steps you will have a good idea of life insurance after divorce can be used for both protection and financial security.
So many things change when you go through a divorce, and can be especially challenging if you have children. Life insurance can play an important role in both alimony and child support obligations. We help many clients going through a divorce with their life insurance purchase options, many of which have been mandated through a court order. We are here to help you obtain a policy which will serve your desired protection needs, while also getting you the best prices available in the market.
Before you consider any uses of life insurance after divorce, you must first update your life insurance policy information. This should be done on annual basis anyway, but people often negate this action. When you are going through a divorce you will find yourself updating many of your addresses and also banking information. It is also important to update your beneficiary information on your retirement accounts, as well as accounts which you may have through your employee work benefits.
Speaking of beneficiaries how about your life insurance beneficiary?
If your ex-spouse is your listed beneficiary it is something you need to consider. You do not need to change them as your beneficiary, but it is something you can do if you want to. If you are the owner and payer on the life insurance, you do not need the permission of the beneficiary to change them off the policy.
This is a topic which really hits home for me, as I have seen first hand the implication of not updating your life insurance policy after a separation occurs. I have seen ex-spouses receive life insurance proceeds even after they have remarried to someone else (who received no proceeds). This is obviously an awkward situation for everyone involved. Changing your beneficiary is a quick thing to do, and can be done in a few minutes by calling your life insurance company.
Long story short, keep your life insurance beneficiaries up to date!
Life insurance is one of the most dynamic financial products in the world, and can be used for a variety of events in your life from a home purchase, retirement, and also throughout the divorce process. Even though you may no longer be married to your ex-spouse you still may have significant financial obligations to each other.
These may include income needs, mortgage , and home purchases, and most of all children. We have encountered many clients who owned a house, and split a mortgage with their ex-spouse. After the divorce, it was court ordered for them to get life insurance policies on each other so the mortgage would be paid if something were to happen to them. This can be done quite easily and quickly.
The most common use of life insurance after divorce is to fulfill alimony and child support payments. If the payer of these obligations were to pass away it could have a significant financial impact. These life insurance policies can be designed so the life insurance proceeds can be used for the care of your children in the event of your passing. In some states this is actually mandatory in child support arrangements, to ensure children will be care for financially in the event of one parents passing. As we all know, parents need to have life insurance anyway.
A divorce can have a large impact on your finances, which is why we understand its important for most people to get the best deal on their life insurance after divorce. At Waterway Financial Group, we not only search over 50 life insurance carriers to be sure we are getting you the best policy, we also make it as convenient as we can.
Our online life insurance quote form will display quotes from multiple carriers on one screen, in real time. You can even start applying for a policy online. If you are looking for a policy, and need it fast we can help with this as well. Our no-exam life insurance policies can help cut down on the processing time if you are in a rush. If you have any additional questions regarding life insurance after divorce, we are just a phone call away.