Among the messy tasks that come with a divorce, sorting out life insurance is often overlooked. In the midst of divvying up assets and, if you are a parent, ensuring your children adjust as smoothly as possible, figuring out what to do with life insurance sometimes falls by the wayside. Don't let it.

Dealing with life insurance is an important part of the divorce process. This is especially true for divorcing couples who have children. Keeping life insurance in order protects the financial interests of both parties and their dependent children. This process involves making necessary beneficiary changes, accounting for the cash value in whole or 澳洲幸运5开奖号码历史查询:universal life policies, protecting alimony and child support income, and most importantly, ensuring that any children involved are 澳洲幸运5开奖号码历史查询:financially protected, no matter what.

Update Beneficiaries

The purpose of life insurance is to protect those closest to you from financial devastation if you die and your income is lost. Most married people with life insurance list their spouse as the 澳洲幸运5开奖号码历史查询:primary beneficiary. Having your spouse as your beneficiary ensures that they can keep pꦗaying the mortgage or rent, put food on the table, and—if applicable—raise the children without your income. Having l♋ife insurance is especially important if you provided the majority of the income.

In the case of a divorce, particularly an acrimonious one, there is a good chance you w❀ill no longer want your ex-spouse profiting from your death. If no children are involved, few good reasons exist to continue having an ex-spouse as your life insurance beneficiar🎶y.

Most life insurance policies are revocable, meaning the policy owner may change the beneficiary at any time. Some appoint 澳洲幸运5开奖号码历史查询:irrevocable beneficiaries, in which case the beneficiary, once designated, cannot be changed. The easiest way to change your beneficiary after the divorce is to contact your life insurance agent so that they c✅an verify if the policy is revocable and redesignate your beneficiary.

Account for Cash Value

Some life insurance policies, particularly whole life and universal life policies, accumulate cash value over time. Each month when you make your premium payment, a portion of that money enters a fund that grows with interest. The balance of this fund is the policy's cash value. This is your money. At any point, while the policy is active, you may elect to forgo the 澳洲幸运5开奖号码历史查询:death benefit and in🍰stead take the cash value. This process is known as cashing out your life insurance policy.

The cash value from a life insurance policy represents part of your 澳洲幸运5开奖号码历史查询:net worth as a couple. The most equitable thing to do is to list the life insurance policy, including its cash value, 澳洲幸运5开奖号码历史查询:among the marital assets to be𒉰 divided. In a divorce෴ in which assets are divi🔜ded evenly, this means each spouse leaves the marriage with half the cash value from the policy.

Protect Alimony and Child Support

Protecting alimony or 澳洲幸运5开奖号码历史查询:child support is especially important for the spouse who takes primary custody of the children after the divorce. Child support from the noncustodial parent is supposed to go toward feeding and clothing the children, among other expenses. If the worst happens and the noncustodial parent isn't around anymore, this income is lost and potent꧑ially leaves the custodial parent in a dire situation.

If you have cusꦓtody of your childrenꦆ, the most prudent way to protect yourself from this scenario is to maintain a life insurance policy on your ex-spouse with a benefit amount high enough to replace your child support or alimony income at least until the last child is grown.

Single Parents

One of the biggest challenges of divorce is that it frequently turns people into single parents. Sadly, many parents find they can't rely on their ex-spouses, financially or otherwise. Divorced people in these situations become their children's sole caretakers. Should this happen, have a plan in place.

With your ex-spouse no longer in the picture and your children relying solely on you for financial support, if you die, they have nothing. Without your income, your children have no way to feed or clothe themselves, much less provide anything beyond the basics. A guardian—either a relative or someone appointed by the state—will assume the care of your children (you should update your will to establish a guardian). Even if you've made plans, there are still manꦍy unknown factors in this situation.

If divorce makes you a single parent, you need to take out adequate life insurance on yourself to protect your children or other dependents. To 澳洲幸运5开奖号码历史查询:determine tওhe minimum benefit amount, calculate how many ye🍌ars you have until your youngest child turns 18 (or, to be extra safe, 21) and multiply this number by your annual💧 income.

For example, if you make $50,000 per year and your youngest child is 6, a death benefit of $600,000 will replace your income until that child is 18. A $750,000 benefit would see the child through until the age of 21. Choosing the larger benefit amount can be prudent as long as the premiums are not too oppressive. If you want to be even more conserva𝓡൲tive, it may make sense to purchase a policy with an inflation rider to take rising prices into consideration.