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Life insurance policies during a divorce may be needed

On Behalf of | Jun 26, 2022 | Divorce |

If you and your Texas spouse have decided to get a divorce, following a few essential steps is necessary to complete the process. You’ll need to assemble documents, open new checking and savings accounts, create new wills and calculate your expenses. In addition, examining the need for life insurance should be completed when alimony or child support is involved.

Assembling documents

Gathering documents associated with your assets, debts, income and insurance is the first step in a divorce. You’ll need to assemble copies of the following to get started:

  • Tax returns
  • Bank statements
  • Investment accounts
  • Credit card statements and other loan documents
  • Retirement accounts
  • Insurance policies

Examining insurance policies

Examining your life insurance policy or looking at purchasing one may not be on the list of priorities when you’re getting a divorce. However, if alimony and child support are required, obtaining an insurance policy may be essential to ensure these factors are protected.

Elements associated with life insurance coverage

If life insurance coverage is part of the divorce decree, determining a period for life insurance coverage can vary. In this situation, you’ll need to factor in the ages of your children who require support and the alimony length. You may only need term insurance to cover a specific period to protect your child’s financial future.

Paying life insurance premiums after getting divorced

If a life insurance requirement is mandated in the divorce decree, you may be required to pay the premiums. It’s essential to define the responsibilities of both parties when life insurance premiums are being paid as missing one could be detrimental to the beneficiaries.

Understanding life insurance policy ownership is essential

When life insurance is involved in a divorce, it’s essential to clearly define the policy owner as they can change rates, beneficiaries and insurability. If you’re going to receive alimony, you may want to have a provision in the divorce settlement stating that beneficiaries can’t alter the insurance policy without your consent, protecting your interests.