Divorce is tough, and it can be even harder if there are children involved. Even in amicable situations, decisions will likely need to be made on issues like custody, child care, support payments and even life insurance.
Life insurance can become a stipulation during a divorce negotiation, especially when child support is involved, according to Women’sDivorce.com. Even if you aren’t the main caretaker of your children, you can consider providing for them and their future with options like term or permanent life insurance.
Signing up for a term life insurance policy, and naming your ex-spouse as the beneficiary is one way you can provide your children direct support, even if you were to pass away before they reached adulthood. The policy can help support their day-to-day needs, or help to pay for college tuition. And because term life insurance ends after a set date, you can schedule it to end after your children reach adulthood.
But if you and your former spouse already had insurance policies, you might need to review those and make sure they reflect your new status. For example, depending on how your children are supported after the divorce, you might need to change your policy to make sure that financial support will continue if you were to die. And you might need to completely change the policy, because minors typically cannot receive life insurance benefits until they turn 18, according to insure.com.
In this case, setting up a trust life insurance plan might help, because then the trustee generally handles passing on the benefits for your children until they reach a certain age.
One other thing you may want to consider is leaving your ex-spouse as a beneficiary on your life insurance policy if she is dependent upon your income for keeping your children’s lifestyle stable.
Contact your life insurance company prior to, during or after your divorce, if you need to review, change or add to your policy in an effort to give your children security in their financial future.
