Among the many other things divorcing couples need to think about is their life insurance. With the complexities involved with dividing Tennessee property, figuring out child custody and support, and dealing with the emotional fallout involved with a divorce, it’s easy to overlook life insurance. However, it’s important to consider.
Why is life insurance important in divorce?
Estranged couples should consider life insurance during their divorce for several reasons. One spouse might agree to receive life insurance coverage paid for by the other spouse in exchange for reduced alimony. Life insurance coverage can provide financial security to the lower-earning spouse and help them to make ends meet in case their former spouse passes away. Having a life insurance policy in place can also help an ex-spouse provide for the children if child support ends due to the death of the other parent.
What to do about life insurance
One thing many people fail to do is to check the beneficiaries on their life insurance policies after they divorce. If you have divorced and do not have an agreement to continue covering your ex-spouse, you should designate new beneficiaries. You likely don’t want your ex to receive the proceeds of your policy if you pass away.
A few things to consider if life insurance is on the table in your divorce include the following:
- The amount of coverage
- The duration of coverage
- Responsibility for paying the premiums
- Whether life insurance will be security for child support and/or alimony
Getting divorced is not easy, and the process requires you to think about many things. While considering life insurance might seem like one more task to add to the pile, it can provide you with leverage in your negotiations and could help you negotiate an agreement.