Divorce is a difficult time for all parties involved, and as you gather together and divvy up what’s left in the wake of your separation, life insurance is something that will become an inevitable issue. Before proceeding with divorce papers, it is important to reassess life insurance coverage levels, whether it can help to protect income received from child support payments or save money by changing the term of coverage.
One way to save money on life insurance is to purchase term life insurance instead of a whole life policy because of its impermanence. Term life policies allow for flexibility once the dust clears and enables both parties involved to move on with their lives.
Divorce and Ownership of a Term Life Policy
During a divorce, the owner of the policy has the ability to change the beneficiary at any time without any notification and take out cash values in the policy if they are available. This makes things difficult if there is a conflict or any sort of disagreement during the divorce. The duration of the policy may be held until the child reaches an age of maturity and all child support payments have been settled.
The type of life insurance coverage that is chosen during divorce is just as important as the people involved. For families across the nation, reassessing life insurance policies during divorce allows everyone to benefit, even if it may be a difficult and painful process for the entire family.
photo credit: Editor B