When to Buy Life Insurance: Getting Divorced

One of the downsides to modern life is the high divorce rate. If you are married, you have nearly a fifty percent chance of struggling through this life event. When your life plan is sidetracked by divorce, you will need to review your entire financial situation, including any life insurance policies that you currently have or may need to have because of a court order. Your focus has changed from joint planning to taking care of yourself after you have met the needs of any children from the marriage.

Getting divorced? Request a life insurance quote

How Does Divorce Affect Life Insurance?

• You may be required to have enough coverage to provide funds for child support or alimony in the event of your death. Usually, this type of coverage is necessary only until your child reaches the age of 18 or your ex-spouse remarries. A term life insurance policy may be adequate for both types of support and can be cancelled when your obligations are met. This type of insurance is also economical.
• Depending on your state of residence, you may be required to pay alimony for the life of your ex-spouse. A combination of term life and an annuity may work economically for your situation.
• You should review all policies you currently have, including any that are provided by your employer or retirement fund. Be sure that you change beneficiaries and that your coverage amounts reflect your changed circumstances.
• Provide enough life insurance to cover burial expenses, as well as any debt you have, such as car loans, a mortgage, or credit card debt. This pre-planning can protect your parents, children, or siblings from any financial burdens if they are the ones responsible for settling your estate. Adequate coverage of these expenses will also allow you to leave a larger legacy to your children.
• If you haven’t already done so, you should plan for funding your own retirement. Remember, you will be responsible for the entire amount you will need in order to retire. A whole life policy or annuity may be a good fit in your overall investment package.

Careful planning during this difficult time can ensure that you will be able to affordably meet any legal obligations and recover financially from the blow of divorce.

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