Important Facts

Life Insurance Guidance for the Newly Divorced

For the newly divorced, life insurance needs can change or may need to be in place to address a new need. Depending on your divorce decree, you or your ex may be required to carry a policy.

Life Insurance Considerations for The Newly Divorced

While having a life insurance policy is always a good idea if you're married and/or have children, it's by no means legally required. That can change, however, in the event of a divorce. The following is life insurance guidance for individuals who are questioning what they should do with their life insurance policy as they prepare for divorce.

Resist the urge to immediately change the names of your beneficiaries on your life insurance policy once divorce proceedings have begun.

Even if you do not have minor children, you may be legally required to maintain single person life insurance on yourself for the benefit of your ex-spouse. Wait until your divorce is finalized to take such action, and be sure to seek life insurance guidance from your divorce attorney and/or life insurance agent who can help you make the appropriate changes.

In the event of a divorce where minor children are also involved, the noncustodial parent might be required to take out a life insurance policy for the benefit of their ex-spouse and/or minor children. Failure to activate or maintain such a policy could be a violation of applicable laws.

This course of action is to ensure that your ex-spouse/children receive sufficient alimony/child support in the event of your untimely death. In such cases, the noncustodial parent is responsible for paying the life insurance premiums. Be sure to go over your divorce agreement carefully with your lawyer, because such stipulations are actually required in certain states. The ownership of a new policy or your current policy can also be negotiated in your divorce agreement. In some cases, your ex-spouse may feel more comfortable paying the premiums themselves to ensure the longevity of the policy.

If there is a life insurance policy stipulation in your divorce agreement, you will most likely have to maintain such a policy as long as alimony or child support payments are required.

If you have minor children, a term life insurance policy may provide sufficient coverage until they reach adulthood. Be aware that in some cases, the amount of life insurance you are required to maintain can also be stipulated in the divorce agreement.

If no such stipulation is made, be aware that if you change your life insurance policy beneficiaries to your minor children, they cannot receive the death benefit if they are minors under the age of 18 (or 21 in some cases, depending on their state of residence).

If you have not appointed a custodian on your life insurance policy paperwork, the probate court would appoint a custodian to oversee the funds until your children are of age. After you divorce, take the time to name a custodian on your life insurance policy, whether it be your ex-spouse or another trusted friend or loved one. If you'd prefer to leave your ex-spouse out, you could set up a living trust and name the trust as your beneficiary on a life insurance policy, and distribute any payouts to your children according to the stipulations specified in the trust, with the assistance of a designated trustee.

You and your ex-spouse may want to consider insuring each other if children are involved.

If there is no stipulation in the divorce agreement, you and your ex-spouse should privately discuss purchasing or continuing to maintain life insurance policies on each other for the benefit of your minor children, with each of your acting as both a policy owner (thereby responsible for paying the premiums) and a beneficiary. Even if you are the non-custodial parent providing child support payments, if you suddenly had to assume full-time responsibility for your children, it could represent a dramatic increase in your daily expenditures.

If you need more life insurance guidance, or information about the financial aspects of preparing for divorce, you can find both in our Protective Learning Center.

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax‐related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Life Insurance Guidance

The following is life insurance guidance for individuals who are questioning what they should do about their life insurance policy as they prepare for divorce. Whether you have minor children or are trying to identify the right policy for yourself, it's important to understand your options. Talking with the best life insurance companies will allow you to see which will best meet your needs. If you're looking for life insurance guidance due to a pending divorce, we hope you'll find this general information helpful. For more information on financial topics, visit our learning center.

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