There are a lot of different types of life insurance. While it’s a good idea to include life insurance in a divorce settlement, make sure you do not use the “group life insurance” from a workplace. That’s because group life insurance actually hinges on a job.
Group life insurance may not be offered in other jobs. Thus, if your ex-spouse will decide to drop out the workforce or change jobs, he may not have group life insurance then. Instead, consider term life insurance as it is cheaper and it doesn’t also depend on a job.
Here are divorce-tips regarding life insurance:
- Disability insurance is more important than life insurance. If your ex-spouse can’t work due to a disability, he or she may seek a reduction in support payments in court.
- The term of your life insurance should be aligned to the years of child support stated on your divorce settlement. Thus, if the agreement says you should provide 15 years of child support, you can get a 15-year term life insurance policy.
- If you have no control over your ex-spouse’s life insurance but you’re a beneficiary, make sure that your divorce settlement states that you are a “party of interest” on their life insurance policy. This way, you will be notified if payments stop.
Do not name a minor as your life insurance beneficiary.
Among the many reasons for getting life insurance is to provide for children in case you’re not around anymore. But there’s one tiny problem: minors can’t receive life insurance money. Thus, if you name your minor child as a beneficiary, the life insurance company may not release the money until they turn 18 years old.
If you have minor children, create a life insurance trust for them. This trust not only allows them to receive money at any age, but it will also outline how it should be used. You even have the option of only disbursing certain amounts at specific ages like 20, 25, and 30.
Although setting up a trust may cost a few hundred dollars, it’s a wise idea if you have minor children.
Your life insurance policy should include “living benefits.”
Your life insurance policy should contain “living benefits” that would allow you to access it yourself even if you’re still alive. Having access to your policy in case you got ill or you badly need the money can prove crucial.
Roper Insurance Services offers life insurance products that would help secure your financial future. We have a wide range of policies available to choose from. Know which one best suits your situation, talk to one of our agents and get a free life insurance quote. Call us at (828) 388-1851 or visit us at our office today!