Life Insurance And Divorce (Why No Exam Is Your Best Option In 2019)
One of the worst things about going through a divorce is dealing with the separation of all the things that were once part of a whole, and something like life insurance is usually last on the list.
But here’s the thing:
Dealing with life insurance and divorce doesn’t have to be complicated, and if you make it part of your plan in the early stages of your divorce, it can at least make a hard situation a bit easier.
Today I am going to discuss how to protect yourself and your kids during a divorce best and why you should choose a no medical policy when dealing with a divorce decree for coverage.
Managing Beneficiary Changes During A Divorce
When it comes to life insurance and divorce, you will always want to figure out how your life insurance policy is set-up, but first, let's talk about the different roles that make up a policy.
4 primary roles make up a life insurance policy, and each of them can be a different person:
The owner of a life insurance policy is the only person that can make changes to the plan or cancel it.
Most of the time, the owner is also the Insured; however, in most marriages, the spouse that handles the bills is usually the owner from my experience.
Remember, whoever is placed as the owner of the policy is the only person that can make changes to the policy.
That means they can change the beneficiary of the policy or the percentage the beneficiary receives.
The beneficiary is the person that the policy is going to pay out to.
As long as the person has what is called “Insurable Interest” you will be able to put them as your beneficiary.
Insurable interest just means anyone who would be negatively affected financially by your death like kids, spouse, a cousin, or a best friend.
There are two types of beneficiaries, a Primary beneficiary, and a Secondary (Contingent) beneficiary.
You can have more than one Primary beneficiary and more than one Secondary beneficiary as long as the percentage for each of them add up to 100%.
Below is an example of how it could look:
Benefit Amount: 100%
If the primary beneficiary passes away before the Insured, or at the same time as the Insured the benefits will go to the secondary beneficiary.
Benefit Amount: 100%
Kid 1 - 30%
Kid 2 - 25%
Kid 3 - 45%
The way the above scenario would work is that if you were to pass away, 100% of the life insurance would pay out to your spouse.
However, if your spouse was to pass away before you or if you guys passed away at the same time, your kids would receive checks each for the percentage you chose.
The insured is the person the policy is taken out on.
The payor is the person making the monthly premiums on the policy, and this can be the owner, the insured, the beneficiary or someone else.
Now that we know the different roles of an insurance policy lets discuss how they work in a divorce.
The first thing you must find out before you can change beneficiaries or remove your ex-spouse is who owns the policy.
Whoever owns the policy makes the final decision.
If you own the policy, you need to decide if you will remove your ex-spouse completely from the policy or if you make your kids the primary beneficiaries.
Protecting Child Support and Alimony Income
If you are the parent that gets primary custody of your children and are receiving alimony or child support, you want to make sure that you protect that income.
If your ex-spouse passed away, you want to make sure they would have a life insurance policy with enough death benefit to cover the child support or alimony income for as long as the payments were required.
Usually, since protecting the kids are generally the most important part for everyone in a divorce, a judge can or will issue a decree in the divorce requiring this coverage to help protect the children.
Why Get No Exam Life Insurance For Your Divorce
When it comes to a divorce decree, you are probably going to be required to obtain life insurance coverage within a certain amount of time for a specific amount of time.
To make sure that you are able to get coverage before time is up, a no medical life insurance policy is going to be the best option for you.
It's the closest thing to getting life insurance online instant.
Life insurance without a medical exam gives you the ability to be covered very fast, you can choose a 2, 10 or even a 20 year term option and you can purchase up to $1,000,000 in coverage.
To avoid getting involved in an extremely long waiting period when trying to purchase life insurance for a divorce, I would avoid any type of policy that will require an exam or medical records.
Dealing with a divorce is never an easy task, and neither is dealing with life insurance.
However, if you are going through a divorce and a judge has made it a requirement for you to purchase life insurance then you should get a no exam life insurance quote today and apply online for coverage.
While I am sure the last thing you want to talk about is life insurance and divorce, but if you take the time to deal with it early it will be less of a headache later on.
Like divorce, life insurance can be an emotional ordeal, just make sure you cover all of your basis.
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Sa El is the Co-Founder & CEO of Simply Insurance. He is a Licensed Life and Health Insurance Agent with over 11 years of experience in the industry. He is an Entrepreneur, Insurance Educator and Field Underwriter. Sa is on a Journey to get 1 Million Families insured.