Divorce is never easy, but there’s one part of the process that can be especially tricky—updating your life insurance. Between packing up and splitting assets, it can be easy to overlook this important step. So, why exactly should you make sure to update your life insurance after a divorce? Read on for the scoop.
Going through a divorce is emotionally draining, to say the least—but don’t forget that it also involves some practicalities too. One of them? Updating your life insurance policy so that you and your former partner are both properly covered in the event of any unfortunate happenings. Here’s what you need to know about why updating your life insurance is so important during a divorce—and how to go about making sure it gets done.
Why It Matters
If you have life insurance — which many people do in order to provide financial stability for their families in case something happens to them — it’s likely that you named your former spouse as the primary beneficiary on the policy. After all, when you got married, this person was probably the main person who was financially dependent on you—and at the time, it made sense for them to be first in line for those funds if something were ever to happen.
But now that you’re no longer together, things are different. That’s why updating your life insurance policy is so important during a divorce: You want to make sure that any money from an insurance payout doesn’t end up going somewhere unintended (like your ex). At the same time, often times a divorce settlement will require you to keep a certain amount of life insurance on you while naming your ex-spouse as beneficiary. Make sure you follow your legal requirements at a minimum to avoid an potential legal issue.
How It Works
The first step is easy enough: Call up your insurer and let them know what’s going on with your divorce. Then they can usually help point out which documents need updating and which forms need signing in order for everything to get squared away correctly. In most cases, this means filling out lots of paperwork and having your ex sign off on it as well (they may have even more paperwork than you do). And once that’s all finished off and sent back into the insurer’s office, then voila! You’re set! You may be required to purchase a new life insurance policy to make sure your divorce settlement as well as your family’s financial lives are in order. The good news is that we can help and it can take 10 minutes or less!
Life insurance policies often become overlooked when couples go through divorces — but don’t let yours slip through the cracks! Make sure that after a split-up or separation, you take care of adding, updating or changing over any policies so everyone involved is covered and protected properly according to current circumstances — including yourself! A little bit of extra legwork now can save a lot of headaches down the line; so if you’re going through a divorce, make sure updating your life insurance policy isn’t forgotten amongst all the other details!
Photo by Hutomo Abrianto on Unsplash