Divorce is the legal separation of a couple. As a legal entity, it has to be regulated by law. In the United States, it is generally regulated by state-based laws. However, federal laws can be adopted in some cases.
Life Insurance and Divorce
Life insurance is an agreement reached between an insurer and policyholders (i.e the couples in the case). It is one of the major concerns that must be properly looked into during the separation process.
When properly looked into, the financial interests of both parties and their children are protected. What you have to do to ensure such includes
- Making necessary beneficiary changes
- Accounting for the cash value
- Protecting child support
- Ensuring the financial protection of children
Is Life Insurance A Marital Asset?
Yes, it is a marital asset, depending on the type. In the U.S, there are two types; term and whole life insurance. The former lasts for a designated period of time and has no cash value while the latter has cash value and lasts until death.
What Cash Value Is?
Cash value allows for term policies to be taken into account asset during property division in divorce. Therefore, term policies would not be included in permanent life insurance but included in that of term life insurance. However, in cases like joint policies which are permanent life insurance, splitting is possible, though it has to be listed as assets initially.
Can Your Spouse and/or Children Benefit?
The U.S laws regulating life insurance generally gives room for spousal or child support depending on the situation at hand. For instance, the capability of the parents to provide support for a child after a divorce determines whether he or she benefits or not.
Sorting out life insurance is simple but tricky. It can, therefore, be difficult for those that don’t know their way around it. In order to get access to a marital separation agreement in Florida, Indiana, Nevada or any other US state for free, get to forms.legal today.