Life Insurance and Divorce
No one likes to think about divorce as they are shopping for life insurance with their spouse, but unfortunately it is responsible to consider all possibilities when choosing a policy and a beneficiary. The WomensDivorce.com website offers some basic information to consider when you are facing a divorce. You not only need to consider existing life insurance, but many divorce provisions will include a stipulation that the supporting spouse should carry a life insurance policy to guarantee the children will be provided for in the case of a supporting parent passing away.
You may be asking yourself if this is really necessary as the supporting spouse. Bottom line is that many divorce proceedings will not leave you with much of a choice. As you negotiate your divorce settlement, you will need to consider who will be the owner of the life insurance policy and which beneficiaries will be named. Provisions can also be added that ensure children will be entitled to part of the ex's estate in the case that the life insurance policy lapses.
The site talks about some important questions to discuss with your spouse or lawyer as you approach divorce. Can the ex drop the spouse as a beneficiary at any time? Can your divorce be modified to include specific life insurance provisions? Will the insurance payments be taxable income for the beneficiary? Will the life insurance payouts be divisible in the case of divorce? These are just a few examples of the dozens of questions that may need to be asked. Talk to an expert to get the most updated laws on divorce and life insurance in your specific state.