Divorce + Life Insurance | What Are Your Options?
Working through finances in the midst of the divorce can be troublesome and confusing for many.
Separation is normally a muddled procedure. The guardianship of kids and the division of benefits might be challenged in court for quite a long time before an agreement is come to. At that point, there is the question of taking care of children and proceeding with a divorce settlement. The family breadwinner might take over such obligations, but what happens in the event of a sudden change? Life insurance coverage shared between the couple or for the new divorcees needs to stay intact or be sold for a life settlement
How does it work?
Most couples list their spouse as their sole beneficiary with children listed as next in line. You’ll want to change your beneficiary specifications to give your children the primary spot. This is also an ideal time to assess your assets and any estate planning.
Next, if you have child support payments or alimony obligations, you might need to make adjustments to your policy or it’s a stronger reason to seek out a life settlement to safely cover those financial responsibilities.
If you and your former spouse owned a permanent life insurance policy that has accumulated cash value, then those funds may be split between you if formally agreed upon during the divorce process.
Seek a Life Settlement
If you’re getting divorced and have no children or dependents, you may not need the life insurance policy anymore and can sell it to a qualified buyer.
This is usually much more profitable than merely splitting the amount of cash value in the policy, and Abacus can typically pay out two to three times the amount of the cash value that your insurance company would offer you.
Going through a divorce can be troublesome, but it doesn’t have to be overwhelming financially – explore your options and make the right decision for you.