Here’s what you need to know about life insurance & divorce

Divorce can be many things: devastating, painful, stressful, emotional – and it can even be relieving for some. But whatever the case is for your situation, divorce is always complicated. There’s plenty of legal conditions associated with divorce, and in the best-case scenario the split can be extremely clean – or it can be arduous, lengthy, and taxing.

Often when things are being divvied up, something that can be easily overlooked is life insurance. Life insurance is sometimes purchased when a couple first gets married, or when they have their first child, or at any major point in their shared life. During divorce, the exact specifications of your life insurance coverage may need to change. Here’s what you need to know about life insurance and divorce.

Who will be designated your beneficiary?

In most life insurance policies purchased when you and your spouse (or ex-spouse) get married, you would typically name your partner as your beneficiary. You may also have any children or dependents you have also named as beneficiaries, but that’s besides the point. For obvious reasons, you’ll likely want to have a family member, or a close friend receive the life insurance money in the event of your death instead of your ex-spouse. If you are co-parenting with your former partner, or they’re raising your children, you may want to keep them as your beneficiary, given that there will be a lot of expenses they’ll be solely responsible for in the event of your passing.

If you are deciding to remove your ex-partner from your life insurance policy, you’ll need to call your life insurance provider and ask them for the necessary forms to do so. It’s a little bit of paperwork, but after it’s done, you won’t need to worry about it anymore.

What if you don’t have any life insurance?

If you do not have any life insurance coverage, it’s a good idea at this point to consider it. This is especially important if you have dependents and/or anyone who depends on you financially, even after a divorce. Divorce is difficult – there’s no question about it. But you’ll still want to ensure that your dependents have something to help protect them even after your unexpected passing, especially if your ex-partner might not be in the picture any longer after your divorce.

What about spousal support and child support?

If you depend on your ex-spouse for support, it can get complicated. In the event that they should pass away, and the support payments ceased, you (and any dependents you haver) may not be able to maintain the current lifestyle that you have. Worse, it may become difficult to make ends meet at all. You’ll want to ensure that your separation agreement, when determining all the legal bits and bobs of your divorce, includes a provision which states that your ex-spouse’s life insurance policy must contain a large enough sum where you are started as the direct, irrevocable beneficiary to cover any long-term child support or spousal support that you require.

What about other insurance policies?

It’s not just the life insurance that gets complicated after a divorce. Car and home insurance may be impacted too. Ensure that the name listed on your homeowner’s insurance is the same one as on your home title/car ownership. If you had your coverage through your ex-partner, you’ll want to get replacement coverage ASAP to avoid a gap in your insurance.

If you want to take care of your insurance needs correctly without running into serious issues, you might need to seek independent legal advice. If you want to take out a new policy or increase what coverage you already have (i.e., for your life insurance) consult with a broker like the friendly experts here at Panda7. We understand that divorce is a difficult time and we don’t want to make it any more difficult on you by having to go through additional complexities with your insurance.

Why buy life insurance after a divorce?

Protect what matters most with life insurance. Depending on your needs post-divorce, you might be able to reduce your coverage to a term life policy, or upgrade to a permanent life policy if your needs have changed. Panda7 partners with some of the best life insurance providers in the country and is more than happy to get you what you need for an affordable price.

Life insurance after a divorce may still be about protecting your ex-partner if they were/are financially dependent on you, and/or any dependents you have if you should unexpectedly pass away. This could be children, close friends or family members who require your support, step-children, and so forth. This ensures that they can maintain the same quality of life they had as when you were alive.

Discuss with a Panda7 life insurance broker today for more information about the coverage you may require following a divorce, or go right ahead and get a free quote ASAP.