Most of the time, when a person gets a life insurance policy, the person makes his or her spouse the beneficiary. In general, that is a very smart idea. However, if the marriage ends in divorce, things can get a bit tricky when it comes to life insurance. State Farm Insurance has some advice for people who are about to divorce. Read it over before you sign “the papers”.
It is always stressful when a marriage ends in a divorce, even for those who have an “amicable divorce”. Getting a divorce means that there are a plethora of things that you have to make decisions about. You and your soon-to-be-ex spent years making a life together. It is going to take a while to untangle from it.
In addition to figuring out decisions about housing, and custody, a couple who is going through a divorce needs to think about their insurance coverage. Many people have a life insurance policy, because it is smart to have one. Unfortunately, it is the life insurance policies that tend to get ignored when a divorce happens.
State Farm has created a detailed, and easy to understand, blog about some tips for people who are about to go through a divorce. They suggest that you take a close look at their tips before you sign your divorce papers. Some of the tips that State Farm Insurance suggests came from the Insurance Information Institute.
According to Steven Weisbart, PhD., who is the senior vice president and chief economist at the Insurance Information Institute, “Life insurance policies are often used to secure alimony and child support payments”. You may want to check over your divorce papers to see if it says anything about this sort of thing in regards to your life insurance policy (or your ex-spouse’s policy).
You might want to change the beneficiary on your life insurance policy before you officially sign the divorce papers. Many people remove their soon-to-be-ex spouse as the beneficiary, and make one of their children the beneficiary instead. You might want to designate exactly when the death benefit payout would be transferred to your children, and exactly how much each would receive. This could prevent arguments later on, at a time when your children are grieving your loss.
In many cases, it is wise to make sure that your spouse is no longer in charge of paying for your life insurance premium. There is the risk that your ex could decide to make things more difficult for you by “forgetting” to pay the bills that are in your name on time. These are just a few of the tips suggested by State Farm for people who are going through a divorce.
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