No one likes to think about the possibility of divorce. Unfortunately, it does happen and it’s a good idea to be prepared for all eventualities.
Whilst in the midst of a divorce, you’re probably not thinking about life insurance.
But it’s actually an important issue to consider, as your life insurance policy may be affected by the divorce proceedings.
Because life insurance can be a tricky issue during a divorce.
When a couple gets divorced, life insurance policies are often one of the first assets to be divided.
The policyholder is typically the person who is named on the policy and the beneficiary is usually their spouse.
If there are children involved, they will usually become the beneficiaries as well. If both spouses are listed as policyholders and beneficiaries, then it can get a bit more complicated.
In most cases, however, the divorce decree will state who gets what portion of the life insurance policy.
But in some cases, especially if there is a large amount of money at stake in the life insurance policy, either party may decide to contest the divorce decree.
However, if your spouse dies before the divorce is finalized, the policy will be paid out to their estate. This can cause problems if you’re named as the beneficiary of the policy, as the money may then be subject to probate.
If you’re going through a divorce, it’s important to talk to your life insurance agent to ensure that your policy is still active and that you’re still the beneficiary. Otherwise, you may not be able to collect on the policy in the event of your spouse’s death.
What If Something Happens To Me While I’m In The Middle Of A Divorce?
Crazy, I know. Nobody likes to think of these things. Life as we know it is unpredictable and we need to be as prepared as we can.
How would it be divided between you and your former partner? How can you prevent your soon to be ex from benefiting?
Unfortunately, the same rules apply unless you have changed your beneficiaries on your life insurance policy.
That’s why it’s always a good idea to stay up on top of things.
Life insurance is another way of protecting yourself and your family in the long run.
Even if you’re not currently facing a divorce, it’s important to review your life insurance policy on a regular basis and make sure that your beneficiaries are up to date. That way, you can rest assured that your loved ones will be taken care of in the event of your death.
Need help with your life insurance policy? Have questions on how to protect yourself in the event of a divorce? Call me today!