When a couple is going through a divorce, simple discussions about property can become heated. Each party involved wants to ensure they get their fair share of the property. In most marriages, couples also have life insurance policies that must be addressed, but unlike other assets, dividing a life insurance policy isn’t cut and dry. The following are key considerations you should make if you are facing divorce and have a life insurance policy with your spouse.
Retain Ownership while the Policy is Effective
Although you are going through a divorce, you don’t have to relinquish your rights to the policy unless ordered to do so by the courts. Barring an order of the courts, as long as you continue to make the payments on your policy, you are entitled to the death benefit.
It’s important to note, it may be in the owner’s best interest to allow the courts to determine how a life insurance policy is handled. By following a court order, you can avoid any potential familial conflicts in the future.
If you decide to keep the policy, it’s important that you make sure you are the beneficiary and the owner of the policy. By doing this, you are saying that you will be responsible for the payments on the policy, and you will be entitled to the death benefit. Being the owner and the beneficiary of the policy gives you complete control of the policy, preventing your former spouse from having any control over the policy in the future.
Sign Ownership Over to Your Children
Of course, some couples may experience contentious divorces, which may make them feel uncomfortable about their spouse having an insurance policy on them. If you are facing this situation, you can always transfer ownership of the policy to your children. In fact, if you have multiple children, your insurance agent can help you set the policy up where all of your children have an equal share of the death benefit.
Whatever decision you decide to make, you must ensure that you update all the insurance policies that you have for your entire family. If you fail to act, you may find that your former spouse may try to contest the fact that you own the policy in the future.
Protect the future of your loved ones. Call Raymond Longoria Insurance at (888) 296-0345 for more information on Laredo life insurance.