A divorce is one of the hardest things you can go through in life. On top of dealing with the loss of your love and partnership, you also have to deal with splitting everything you have built together between the two of you. When sorting all of these things out, one of the things you will have to consider is your life insurance policy: what exactly happens to it when you get divorced? Will you need to purchase a new policy?
Is Life Insurance Considered an Asset?
When going through a divorce, you and your ex will most likely have to split your assets in half between the two of you. An asset is considered anything of monetary value, such as cash, real estate, and any other valuables that you own jointly. Life insurance is considered an asset in some cases, depending on what type of policy it is.
Term life, which covers you for a specific period of time, does not have cash value, so it is not considered an asset. But permanent life insurance, which is a life-long policy with a cash value that grows over time, can be considered an asset because of that cash value. So, if you have a permanent life insurance policy, it might be included in your list of assets, and you’ll have to split the cash value.
What If You Have Joint Life Insurance?
Joint life insurance covers two people for the price of one, which is why it is popular amongst married couples. If you did choose to buy life insurance jointly with your ex-spouse, you will have to consider dividing the policy with your ex-spouse, since joint life insurance policies are typically permanent life insurance policies. Speak to your life insurance company and ask for information on how to split the policy if you are interested in keeping it.
Should You Remove Your Spouse as Your Beneficiary?
If your ex-spouse is named as the beneficiary of your life insurance policy, you can change your beneficiary to someone else without any problems if that is what you wish to do. All you have to do is contact your life insurance company and fill out a form to change the beneficiary. But if you owe alimony or child support, you may be ordered to keep your ex as your beneficiary.
What If You Took a Policy Out on Your Ex?
If you took out a life insurance policy on your ex-spouse and you are named as a beneficiary, you should speak to your attorney about your options. During the divorce proceedings, you might be able to request to keep your life insurance policy in order to protect yourself against loss of alimony or child support payments if something happens to your ex. In some instances, the court can require you to take out a policy on yourself as part of the spousal support agreement.
Looking For A Policy?
Just because you are going through a divorce, doesn’t mean that you shouldn’t have life insurance to protect the financial future of your dependents or business – you might simply have to look for a new policy that better suits your needs. There are many different kinds of life insurance policies to choose from, including whole life insurance, term life insurance, and final expense insurance, so if you’re not sure where to begin, consider using online tools, or speaking with an agent. The right policy for you is out there!
We have provided the top insurance companies that offer life insurance policies below; each can give you hassle-free assistance and the most competitive rates in the nation. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.