Last Updated on May 24, 2021 by Editor N4GM
I wrote a blog series about how your insurance needs to change when you get married. On the flip side, your insurance needs also change if you are divorced or getting a divorce.
It is estimated that about half of all marriages end in divorce these days. As with the series I did on getting married, the getting un-married series will cover how a divorce affects your car, home, life, and health insurance.
Joint Life Insurance After Divorce
Joint life insurance, also sometimes known as LifeInsurance for couples, explains when two different people simply take a policy that insures them simultaneously.
You pay a regular premium, there is 1 contract as well as the conditions of the policy pay both parties that are named.
If you are a part of a couple of taking out concerted life insurance might look like the most obvious option. Perhaps you currently have joint banking accounts along with a loan, therefore why pay two premiums as soon as you’re able to cover them?
But, you will find it unique to think about before choosing a combined life insurance policy.
Beneath we research the crucial considerations that will assist you to make an educated decision concerning whether to pick a joint or 2 policies.
Life Insurance Changes After A Divorce
When you got married, you and your spouse probably got a life insurance policy together. Now that you two are divorced, you will need to update your policy to reflect the change. Here are some tips from the National Association of Insurance Commissioners on how to update your life insurance policy after a divorce:
- If you and your ex-spouse have life insurance policies, make sure to adjust the beneficiaries on the policies to reflect the changes you both want after the divorce is final.
- If you become a single parent, review your life insurance policy, will and retirement accounts to make sure they all indicate the correct beneficiaries.
- If your spouse will be paying for child support, consider requiring that he/she purchase a life insurance policy covering the term of the payments. You should be named as the owner and beneficiary of such a policy to prohibit your ex-spouse from changing the beneficiary name without your agreement.
- Never leave a life insurance benefit directly to a minor child; instead make sure the policy names a contingent beneficiary or a trustee who will act as a beneficiary on behalf of the child. The best way to avoid having the life insurance benefit taxed is for you to own the policy on your ex-spouse and vice versa.
- When considering purchasing life insurance, the amount of coverage you need depends on your financial circumstances and beneficiaries. Do your homework and make sure that the company is reputable, the amount of coverage is adequate, and the policy is affordable and works for you. Children of single or divorced parents may be more financially vulnerable in the event of the death of a parent. The main guardian should carefully choose the level of life insurance to provide the best safety net for the children.
While you are going through a difficult time, it is important to make sure you keep your life insurance up to date while going through a divorce. If you are looking for a new life insurance policy, you can compare quotes online at InsWeb.com.
Stay tuned for how getting divorced affects your car insurance.