You may need to update your life insurance after divorce or widowhood. Here's what you need to know to get started
Losing a partner can be an extremely stressful experience – not only because you are grieving the loss of a loved one and dealing with a future that you may not have wanted or anticipated, but also because the loss of a partner changes many aspects of your
But losing a partner may not change your need for life insurance – especially if you have children. This is because "if you have relatives, there is still a chance that something could happen to you," explains Paya Schlass, Customer Success Manager at Haven Life.
If you already have life insurance, you probably want to keep your current policy. Even if you and your children received a life insurance payment after the death of a partner, the people in your family may still need the extra financial protection that your life insurance can provide.
If you do not have life insurance and you lose a partner due to divorce or widow, it may be time to apply for an affordable life insurance policy. After all, you already know that life can be unpredictable – and you will probably want to do everything you can to protect your loved ones from future financial strains.
What more do you need to know about managing your life insurance needs after to have lost a partner to divorce or widow? Here are some answers to the most common questions.
In this article:
How can you update your life insurance after a widow?
After the death of a partner, it is a good idea to re-evaluate your life insurance needs – especially your children. "Always make sure your relatives have the coverage they need," says Schlass.
Start by updating the beneficiaries of your life insurance, to ensure that your children and all other surviving relatives will be able to receive the payment of their life insurance so smoothly as possible. If your deceased partner remains listed as the primary beneficiary of your life insurance policy, it may slow down the process when it is time for your life insurance policyholder to process the death benefit and distribute money to your beneficiaries.
It is also worth asking. yourself if you are going to increase the coverage on your life insurance. Yes, you and your children may have recently received a payment from your partner's life insurance – but you may also have lost the financial benefits that your partner's income could have provided. Increasing the life insurance coverage on your insurance can give your children a little extra support – and even if you probably do not want to think that your loved ones will experience a second tragedy similar to the one you just went through, it is still important to get all these financial and administrative details in place.
After all, you already know that the worst case scenario can actually occur.
How can you update your life insurance after divorce?
“When it comes to divorce, there are more legalities involved ", Says Schlass. "For example, sometimes as part of a divorce settlement, you may need to purchase life insurance."
If your divorce settlement includes life insurance as part of your spouse support scheme, Schlass recommends that you contact your life insurance company directly to find out what you need to do. to ensure that your insurance meets the requirements of the settlement. "It is best that you contact our team so that we can ensure that you update the policy according to what you have agreed in your divorce decree," Schlass explains. "We will usually review everything with our compliance team."
It is also a good idea to contact your life insurance company if you plan to update your beneficiaries after a divorce proceeding. "If you are divorced and have a policy, we need to do more due diligence before we can just change beneficiaries," says Schlass. "In some cases, you may need to keep your ex-spouse as the primary beneficiary." If your ex-spouse loses child support or maintenance income in a worst-case scenario, for example, they – and your children – may need the protection that life insurance can provide. Similarly, you may want to make sure your ex-spouse has enough life insurance coverage to protect you and your children in the future.
How do you adjust the amount of life insurance you need?
If you want to increase your life insurance coverage – whether You must meet the maintenance requirements of spouses in divorce or to ensure that your children have the financial protection they need should something happen to you in the future – you will probably need to apply for a second term life insurance policy. This insurance will be included with your current life insurance and will come with its own monthly premium payments.
If you have a Haven Term life insurance and you want to increase your coverage, it is a good idea to contact Haven Life directly and talk about your options. . "If your existing life insurance policy is less than 90 days old, we can usually reissue it," Schlass explains. "Then you may need to purchase a second Haven Term policy."
What if you want to reduce the amount of life insurance you currently have? If you have a life insurance policy, your coverage amount, term and monthly premium payments are all locked – for example, you can not reduce your coverage and start paying lower premiums.
In most cases, it makes sense to maintain your current policy, especially on your life insurance premiums already fits into your budget. You can cancel your current life insurance and apply for a new one, but make sure you compare the life insurance rates with the premiums you are currently paying. Otherwise, you may end up paying more money each month for less coverage.
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Can you reduce the length of your life insurance?
Is it possible to reduce the length of your life insurance? Maybe you took out a 30-year life insurance policy with the idea that it would provide coverage until you and your partner retired, for example, but now you just want to keep the life insurance policy until your children graduate from college. Can you contact your life insurance provider and ask them to shorten your insurance duration?
In most cases the answer is no. "Your term length is locked," Schlass explains. This can often work to your advantage, as you do not know what the future holds. Last year, you thought you might need 30 years of life insurance. This year, you're wondering if you only need ten. Next year – who knows?
As before, it usually makes sense to keep the life insurance you currently have. If you end up in a situation where you no longer need a life insurance policy, you can always cancel your insurance. In the meantime, you continue to have the fixed monthly premium payments that were established when you took out your life insurance.
Can you increase the term of your life insurance?
You may also wonder if it is possible to extend the term of your life insurance. Maybe you remarried, for example, and you and your new partner mix a family and / or are considering having another child. Can you contact your life insurance provider and ask them to add another ten years to your current insurance?
Once again the answer is no. "You cannot increase the term of an existing insurance policy, but you can apply for a new life insurance policy when your current insurance expires," says Schlass. You will probably pay higher monthly premiums on your new insurance, as the cost of a new life insurance usually increases as you get older – but once you have set up your new insurance, you will have fixed monthly payments for the next 10, 20 or 30 years.
You also get the peace of mind that comes with knowing that you still have life insurance – no matter what life entails next. Massachusetts Mutual Life Insurance Company (MassMutual). We believe it can be refreshingly easy to navigate life insurance decisions, your personal finances, and overall well-being. ). We believe it can be refreshingly easy to navigate life insurance decisions, your personal finances and overall well-being.
Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less difficult if they suit your situation.
Haven Life is not authorized to provide tax, legal or investment advice. This material is not intended to provide and should not be used for tax, legal or investment advice. Individuals are encouraged to seek advice from their own tax or legal counsel.