FINANCIAL FRIDAY: Life Insurance and Divorce
HUNTSVILLE, Ala. (WAFF) – Divorce is one of those major life events that should cause you to re-evaluate your insurance needs. Many couples forget to discuss this because there are so many moving parts, but experts say life insurance is a crucial component of a divorce settlement.
WAFF spoke to Life Insurance Specialist LeKeisha B. Garner about this topic. Here are some tips she offered.
- If your former spouse owns a policy on you or that benefits you, they control who receives the death benefit and whether the policy stays active. You may be able to transfer the policy’s ownership or change the beneficiary as part of your divorce agreement.
- You will not be able to continue receiving insurance coverage if you are covered through your former spouse’s employer.
- After your divorce, you may want to change the beneficiary from your ex-spouse to your children if 18 or older. However, if your children are still minors you may want to arrange for a custodian to control the funds, set up a trust, or keep your ex-spouse as the beneficiary.
- If you and your ex-spouse will remain financially involved, through alimony or child support, making life insurance part of your divorce agreement guarantees that you continue to receive financial support. Consult with your lawyer about what is best for your situation.
- Bottom Line: Finalizing a divorce can be stressful and complex, but life insurance should have a place in the discussion to ensure your loved ones will have financial support when you’re gone.
For more ways to save, be sure to tune in at noon every Friday for the WAFF 48’s Financial Friday segment.
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