If you are looking for a reassessment of life insurance coverage during divorce, then we must have to say that the best thing to do is to try to reconcile your differences and try to reach an agreement, as divorce must be avoided as much as possible. However, if divorce is inevitable there are certain changes in the insurance policies that you have owned together or policies where one of the former partners is a nominee to receive benefits. Life insurance is also among the items that needs a settlement upon divorce. Discussing life insurance during divorce should not be avoided.
Mostly, former couples will avoid informing the insurance company about their divorce for various reasons. For example, some fear that the insurance company may make them pay extra for the policy to continue, some don’t want to revisit anything of their marriage days in process of getting over the divorce, or some don’t do it just because of laziness. Keep in mind that not informing the insurance company of the changed marital status may prove to be a great hindrance when opting for your life insurance policy, like upon completion of the policy.
The insurer may need to add the other former partner in the program depending on who has custody of the kids in the divorce settlements to ensure the family is still protected under the life insurance policy. Although, it is always advisable to insure both the partners to start with, keeping factor of divorce in mind.
If the couple is divorced, the policy remains effective till the beneficiary is changed explicitly. So, if there is no dependency of the kids at the time of divorce, and the policy owner wants to change the beneficiary or next of kin in case of their demise, the insurance company needs to be informed of the change. Most of the times the insurance company will do this change free of cost, however exceptions may be there. However, if the couple still wants to continue with the same beneficiary for any reasons they can opt to do so.
Life Cover Policy Owner has the ONLY say
Also, you need to keep in mind that only the policy owner has the option to change the aspects of the life insurance policy for instance, benefits, premium, change in beneficiary etc. So, if the man was making payments during the time the couple was together, but the policy owner was the wife, then still the man does not have the option to change anything.
If you are not sure what changes may come into effect on your insurance policy, you may contact the insurance company to send their representative to brief you with any possible changes in any area of the policy.
We understand that divorce is a difficult time, however, keeping a cool head during this situation is essential. You need to understand the emotional phase will go away with the passage of time, but the financial and other decisions you make during this time will go a long way into your life. So, make sure that along with other settlements at the time of the divorce you pay special attention to the life insurance anyone or both of you hold.