When people divorce, they think about child support, spousal support, selling the family home, who gets what and finding a place to live. Their insurance is not exactly a priority. But it should be
What are your insurance needs? Do you have joint insurance that covered your mortgage? What about your beneficiaries on your existing insurance policies? What about group insurance and who controls that? Even changing the banking arrangements if joint bank accounts are paying for premiums should be done immediately. Talking to a life insurance broker can help you make the necessary changes with less stress than doing it on your own.
Also, new insurance policies should be considered for the purpose of protecting and safeguarding child and spousal support. What happens if the payor passes away prematurely? The insurance proceeds can be used to pay that child and spousal support by creating an income stream. It gives peace of mind not only to the payee, but the payor as well. Everyone knows that things will be looked after should something happen that no one planned.
But other insurance such as critical illness might be a good idea to include in the spousal agreement. It too, can ensure the continuation of child and spousal support if a payor becomes ill from an life threatening illness such as cancer. Chances of becoming ill and not being able to work far outweigh the chances of dying prematurely. So why not think about coverage that is paid in one lump tax free sum so the payor can continue to make child or spousal support payments?
There is also the group insurance to think about. If your ex spouse had group insurance under which you were covered, what happens? Are you still covered? If so, for how long? Some group insurance companies may not keep the ex spouse covered beyond 3 months. You need to check the coverage to know exactly what happens.
Talking to a licensed life insurance broker can help you during an incredibly stressful time in your life. They can ensure that things are done correctly and relieve you of the stress of guessing what needs to be done