Divorce can be a difficult time as both parties often struggle dealing with the emotional and financial upheaval. As part of this process, you may overlook your life insurance policy. However, it’s crucial not to miss out on this step, as divorce can directly impact life insurance. Understanding how your policy may be intertwined with your marital decisions is important. Let our team of insurance experts at Amy Tounget Insurance Agency LLC in Midlothian, TX guide you through life insurance following a divorce.
Impact of Divorce on Life Insurance
Here are some common changes that can affect life insurance after divorce:
Beneficiary Designations
If your spouse was previously named as your primary beneficiary, this may need to change post-divorce. Negligence in updating your beneficiary designations could result in your ex-spouse receiving your death benefit in the future.
Policy Ownership
Joint ownership of a life insurance policy can present challenges during a divorce. Life insurance policy ownership may be addressed in divorce proceedings as part of the financial settlement. However, if the policy is held individually, the policyholder retains sole ownership.
Spousal Rights and Obligations
A divorce decree may stipulate specific requirements regarding life insurance, such as maintaining a policy to cover child support or alimony payments. These requirements are legally binding and must be adhered to comply with court orders.
Essential Steps to Take After a Divorce
After divorce, take some time to review your policy carefully. Ensure the beneficiary designations align with your current wishes and circumstances, and update your policy as required. This could involve filling out and submitting forms to update beneficiaries or transfer ownership.
Speak with an Experienced Insurance Agent
For assistance navigating your life insurance policy after a divorce, contact Amy Tounget Insurance Agency LLC of Midlothian, TX.
