If you are going through a divorce, you might be wondering about what will happen to your life insurance policy. Hopefully, by the end of this article, you should have an idea of how your life insurance works in a divorce.
It changes your life insurance beneficiary
Generally, most married persons list their partner as the major beneficiary of their life insurance plan. However, in the event of a divorce, this situation is likely to change since most life insurance plans are revocable. In other words, a life insurance policy owner can change their beneficiary whenever they want. On the other hand, if your life insurance plan does not have this feature, don’t lose hope yet. Simply contact us or your life insurance agent to verify and help you appoint another dependent.
It is included in your net worth
Whole and universal life insurance policies are two of the life insurance plans that build up cash value. And this cash value, which is the accumulation of part of your premiums, is included in a list of your net worth. So, when your marital assets is being divided in a divorce, your cash value will also be divided between you and your spouse.
It protects your kids
Divorce splits the combined income of a family into a single income. Unfortunately, this income might not be enough to care for the kids caught in the middle of a divorce. Nevertheless, life insurance can provide adequate support for single parent without a reduction in their standard of living.