How a new life insurance policy could be a part of your divorce

On behalf of Barli & Associates LLC posted in alimony on Friday, December 1, 2017.

Most New Jersey residents who are in the throes of the divorce process will be dealing with difficult emotions, overcoming financial concerns and trying to protect their legal rights as a soon-to-be single individual. The idea of buying life insurance will not be at the forefront of their minds. However, the purchase of life insurance could become an element in the finalization of your divorce

The reason people buy life insurance is simple. Depending on the results of your divorce, you might have a lot of ongoing financial obligations to your ex-spouse, i.e., alimony, child support and other matters. This creates the risk that if you die, your ex-spouse will stop receiving these benefits. As such, your spouse’s divorce lawyer may negotiate with you to purchase a term life insurance policy that you tie to the divorce settlement. Alternatively, a family court judge may issue a ruling that requires you to buy life insurance as a part of the divorce decree.

Purchasing a life insurance policy that names your ex-spouse as the beneficiary is actually very common in divorce proceedings, so if it happens in your case, don’t be alarmed. In many cases, the policy may be on your life, but owned by your spouse, with your spouse as the beneficiary.

Do you have questions about your divorce and whether you will need to buy life insurance, or whether your ex-spouse will need to purchase a policy? A New Jersey alimony attorney can help you review your situation to determine if a divorce-related life insurance policy could be required in your case.

Source: Nerd Wallet, “Getting Divorced? You Might Want — or Need — Life Insurance,” Robyn Parets, accessed Dec. 01, 2017