Marriage & Divorce

Life insurance professionals and financial advisors recommend reviewing your life insurance policy at least once every year with good reason. The amount of coverage you need changes constantly, and the two events in a family that herald the most amount of change are marriage and divorce. These two events are significant in their occurrence. It’s understandable if you’re not thinking about life insurance at the very moment you’re tying the knot or breaking it. Always keep life insurance on your mind for good reasons; you don’t want to be caught unprepared when the worst happens.

Changes in life insurance for newly-weds:

As the responsibilities of a life lived together now start to take form, the first realization is that your needs are growing, both individually as well as collectively. When you perform a needs analysis as a newly-wed, try and reflect on the addition and multiplications in your life, such as a new house, a shared car or a baby on the way. Providing a comfortable shelter for future plans is imperative, no matter how far away in the future they seem at the moment.

Consider this: your individual needs such as rent, utility bills and daily living expenses will be replaced by joint needs. You and your spouse may think of moving into your own home, which means a larger mortgage that will take several years to pay off. A large mortgage is the biggest expense families try to cover when they purchase term insurance. Your living expenses, on the other hand, might turn out to be lesser because you will be sharing the bills. However, other individual expenses such as college loans or car loan payments remain unchanged. You both may even be investing your own money on the side, or in a combined portfolio. The additions in savings will mean lesser coverage, as long as large loans and other expenses do not offset them.

You may want to start planning for children right away. Remember to buy life insurance before you get pregnant. Pregnancy is considered a health risk and may cost you five times more to buy when you are pregnant.

You’ll need to sum up all your liabilities and future expenses as you calculate your coverage. As you think about life ahead together, consider a life insurance policy as an important decision that will financially safeguard your family.

If you already have a life insurance policy, remember to update your beneficiary list and review whether you need additional coverage to match your future financial needs.

Divorce:

At the other end of the spectrum is one of the most painful things that can happen in a marriage; divorces may be common, but are still unnerving to deal with. The first and most important update you’ll want to make on your life insurance policy is changing your beneficiary list to reflect the divorce. While some people don’t mind an ex-spouse being the recipient of their death benefits, it’s absolutely unthinkable for others. So while the two of you split your estate and make sure everything is being divided appropriately, look at individual finances as well, like your own life insurance policy, to make sure things are in place.

If you have whole life insurance, it can be surrendered for cash value and divided equally. In some states, spouses who pay alimony are required to have life insurance with their ex-spouse as the beneficiary. This is to cover alimony payments, should you die an unexpected death. Remember, a minor cannot be named as the beneficiary on the life insurance policy. You will need to create a trust or appoint a guardian.

If you are a single parent with custody of your children, try getting extra coverage in place to take care of added financial costs. Added coverage will give you peace of mind that your children will be taken care of, should something happen to you as their only provider and benefactor.

There are several other riders, in addition to long term care insurance, on your life insurance policy that will help single parents immensely. The “waiver of premium” rider and “accelerated death benefit” rider will take care of expenses in the case of long term disability and critical illnesses diagnosed while the policy is still in effect. Without another breadwinner in the family, these riders can make all the difference to your family.

At the end, understand that your life insurance policy is in place to offer you peace of mind. In happy times like marriage, and in trying times like divorce, keep your policy up to date so that it can be the safety net it is designed to be. Speak to your insurance agent or get free information and advice online on aggregator websites to see how to review your policy and calculate for changing needs today.


About AccuQuote:

AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.