Life Insurance for Divorcees
In the United States, the divorce rate is at fifty percent and climbing, though no one wants to believe it will happen to them. When it does, your daily routine will be drastically changed and your entire focus shifts from joint future planning to planning for yourself and possibly any children that you may have. You will have to assess your financial situation and any life insurance policies that you may have or need to have due to a court order. Also keep in mind that any previous policies taken out are often considered an asset in divorce proceedings.
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Divorce can dramatically affect your life and any life insurance polices that you have. Consider the following:
Adequate Coverage of All Expenses
Being no longer married means having to cover more financial costs and pay off more debt. Pre-planning all of these expenses will protect your family from having to face the financial burden of your unpaid debt. Adequate coverage will also allow you to leave a larger legacy to your family.
Changing Beneficiaries and Coverage
Be sure to review any policies that you have and make changes to the beneficiaries and the coverage amounts. Failure to do so may result in your ex-spouse benefiting from your policy.
Child Support, Alimony, and Term Life Insurance
You may be required to pay child support or alimony to your ex-spouse, in which case you will have to have enough funds for this in the event of your death. In most cases, this kind of coverage is only necessary until the child is 18 years old or until your ex-spouse remarries. This is one of the more economical policies and can easily be stopped or cancelled, but at least one of the parents should maintain life insurance for the benefit of the children.
Lifetime Alimony and Term Insurance
Some states require that you pay alimony for the lifetime of your ex-spouse. As unfortunate as this is, having both a term life insurance policy and an annuity can help you through this.
Retirement Planning and Life Insurance
Planning for retirement is already difficult enough in a joint partnership, but doing it alone makes things more difficult. An annuity or whole life insurance policy may be ideal when you are planning for retirement on your own.
Although this stage in your life is difficult, it is crucial that you plan carefully to meet your financial and legal obligations to soften the blow of divorce.
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