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Why should I consider life insurance during my divorce?

On Behalf of | May 31, 2022 | Divorce

Insurance might be the last thing on your mind as you end your marriage. Matters like property division and child custody probably weigh heavily on your heart and mind.

Although the importance of life insurance may seem obscure now, the decisions you make now can have lasting implications. Attention to detail may benefit you and your children down the road.

Three ways to protect your interests

You’re probably already aware of the updates you should make to your estate plan once your ex is out of the picture. For example, you’ll likely change your power of attorney and may want to designate your assets to someone other than your former spouse.

There are additional points to think about in terms of life insurance. Consider the following:

  • Cash value. Do you have a policy that has gained interest throughout the years? If you can relinquish the death benefit of this plan, you could include these funds in your divorce terms.
  • A policy on your former spouse. A court may order your ex to make ongoing monetary contributions once you dissolve your marriage. That financial support would vanish if something happened to them, apart from an account designed for such instances.
  • An account on yourself. Naming a guardian to care for your minor children in your absence is essential. But you would also be wise to put a financial plan in place to benefit your children if you pass away.

The types of policies at stake may influence how you handle beneficiary assignments or cash-outs during your divorce. Regardless, be sure you understand the full scope of your financial future as a single so that you can advocate for yourself and your children accordingly.

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