Who Gets the Life Insurance in Divorce?

There are so many things to think about when getting a divorce. With so many assets to divide it can to overlook life insurance, but it is important to know what is going to happen with your life insurance and/or your spouses life insurance policy after divorce. These specific type of life insurance, where you reside, and when the policy he was purchased will influence how your life insurance is handled and whether or not it is considered a marital asset to be divided.

If there is a prenuptial agreement in place, it will likely make it far easier to determine what happen with the life insurance policy. But, if there is not, you can work with a mediator to amicably determine what will happen with a life insurance policy after divorce.Aside from this being important for you as an individual, life insurance is designed to protect love ones in the event of a death which includes children. A typical life insurance policy Will name a beneficiary and this could be that a spouse, child/children, or family member.

Forbes describes areas considerations about life insurance policies during divorce, “How you handle life insurance requirements will be determined by your current and future life insurance needs as well as the affordability of keeping the policies. For example, let’s say you and your spouse each have a term life insurance policy and decide to keep the policies. You might each decide to be both the owner and beneficiary for the other person’s policy. If you have a cash value policy, you and your spouse may decide to terminate the policy and then divide the cash value equally…While marital assets are often split equally among the two parties, a court might determine that one spouse must make monthly alimony or child support payments to the other.

These payments will ensure that the children are provided for and the dependent spouse is appropriately compensated after the divorce. Generally, if there is a child support or alimony obligation, the court will require the spouse paying the support to have life insurance in place. If the spouse making payments already has a policy such as a group life insurance policy, the opposing attorney may require them to keep it. If they don’t have a policy, they may have to purchase life insurance to ensure there’s still financial support if they pass away.”

Speak to an experienced divorce mediator who can help you and your spouse determine the most equitable solution with your life insurance policy during divorce.

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