LIFE INSURANCE POLICIES CAN BE TRICKY DURING DIVORCE

When going through a divorce, many people are thinking of all the possible assets they own. Most people immediately think of the house, cars, retirement accounts and bank accounts. They often forget about one financial tool that could be very important. Life insurance is often overlooked and might be important in providing financial security for you and your children. Sometimes with a divorce, life insurance policies might be changed by the owner, removing an ex-spouse or the children from the beneficiaries.

It is important that you understand your life insurance policies, and speak with your divorce attorney about how these policies might be worked into a spousal support or divorce settlement. If you are receiving spousal support, and your ex-spouse dies, you might find yourself struggling to get by, if you are dependent on that income. To avoid this situation it might be a good idea to try to work out a deal with a life insurance policy, so your financial situation is protected.

Making sure you have proper insurance is important in protecting the financial future of you and your children after a divorce. If the policy has a cash value associated with it, an agreement might be worked out to split that value. Because of the complexity of financial matters and divorce, it might be a good idea to speak with a divorce attorney that is experienced in dealing with financial professionals to make sure your post-divorce finances are secured.

Having financial peace of mind after a divorce is a major step in moving forward in your personal life. Making sure you understand your life insurance policies is important in achieving this financial peace.

Source: The Huffington Post, “Divorce Questions: How Can Divorce Affect My Life Insurance Policy?,” May 2, 2012