Women and Divorce – What You Need to Know – Part 2

One of the things we learn at an early age is that we need to protect our families. And for most of us that means taking out a life insurance policy. You may have purchased a life insurance policy on your own or you may have one through your company and the odds are that your spouse is the primary beneficiary of it. Once you’re divorced, you need to work with the life insurance company to change that so that you can designate who you want to be your primary beneficiary, whether that be your children or your siblings or your parents.

Another thing that is optional but if you have children something you may want to consider is taking a life insurance policy out on your spouse. If you will be getting alimony and/or child support and that will be an important component in supporting yourself and your family after the divorce, consider what would happen if your former spouse died suddenly and you were left without that income. Taking out a life insurance policy on your spouse can provide you with some financial peace of mind in that respect.

Whether or not you decide you need alimony is one thing but, if you have minor children, you must advocate for them by getting sufficient child support. In an ideal world, you and your spouse will be parenting partners that can negotiate a reasonable monthly amount to provide for each of your children. If that’s the position you’re in, you’re very lucky. But if you have an acrimonious divorce, common sense tells you that you need an attorney or arbitrator to ensure that your children are provided for financially.

Another important issue to consider is your health care coverage. Very often, if your company or your spouse’s employer provides health care, it’s less expensive for you, your spouse and your children to be covered under a family plan on one policy. That can’t happen once you’re divorced. In fact, health insurance laws prohibit ex-spouses from being covered under their former spouse’s health coverage.

As the divorce is proceeding, you need to work with your health care insurer (if the health insurance is in your name) to take your spouse off the health care policy. If your spouse has the health care policy, you need to do two things. The first is to make sure that your children are covered under your spouse’s policy. And the second is to shop around for your own health insurance coverage. If you’re employed, check with your Human Resources Department to find out if you need to wait until open enrollment period (usually the last month or so of the calendar year) or if you’re able to get coverage sooner. You cannot afford to go uninsured when it comes to your health (or to become sick and have no affordable access to health care) so this needs to be a very top priority for you.

You should already know that you need a will and a power of attorney, as well as a living will and health care proxy. It’s likely that you’ve designated your spouse as the person with authority to make decisions on your behalf if you’re unable to do so, so you need to decide who that person now should be and update your legal documents accordingly. And if your will provides that your spouse is your primary heir, you should update that to reflect who you want. If you have children who are minors, you also need to consider designating a guardian for them to protect their financial interests in the event of your death before they reach the age of majority.

In our final discussion, we’ll focus on how you deal with your pension and/or 401k, as well as your Social Security benefits.

Life Insurance – No Matter What Your Situation, You Need It.

Life insurance is one of those topics we don’t like to think about or talk about. Thinking about it means you’re facing your own mortality. But the reasons to have it are many and – no matter what your situation – it’s one of the most basic things we can do to protect our loved ones.

Many people who work have the option of purchasing a life insurance policy through their company equivalent to some multiple of their salary at a relatively low-cost (because it’s group coverage). But if you leave your job, the coverage doesn’t follow you. And if you retire from your job, you may be able to continue the coverage but for a much higher rate (or for much less coverage).

So relying upon life insurance from your company – particularly in our still-recovering economy where none of us is guaranteed a job tomorrow – is not enough. Whether you’re single, or married but have no children, or a stay-at-home parent with no income coming in, or a retiree on a fixed budget, you still need to buy life insurance.

Think of the situations your loved ones can and will face in the event of your death. Some of the costs are obvious. There are the emotional and financial costs of a funeral. It can be very easy to run up many thousands of dollars in costs for a funeral from the fees charged by funeral homes and cemeteries, to the costs for flowers and limousines. Having life insurance available to defray some of these costs will be a great help to your loved ones (at a time when not only are they particularly vulnerable but might not be at their most clear-headed in making sound financial decisions).

It’s also possible that someone who dies may have unpaid medical bills and these don’t disappear just because the patient has died. The proceeds from life insurance policies can be used to settle these debts.

If you own your house and have a mortgage, unless your bank has required you to have private mortgage insurance, the balance of the mortgage will become due if you die. If you want your house to pass to your heirs free and clear of debt, it’s imperative to have life insurance in a sufficient amount to cover that debt (and any other debt you may owe as well, whether it’s credit cards or a car loan or student loans).

Particularly when you have a family, whether you work outside the home or are a stay-at-home parent, replacing your lost income (or the value of all you do for your family) should you die is imperative. Being able to provide a regular source of income that will allow your family to stay in their home, or your children to go to college, is one of the great benefits of having life insurance. If you’re retired and living on a pension or Social Security benefits, it’s likely your spouse would lose some of those benefits upon your death and life insurance can help fill that gap.

The sooner you purchase life insurance, the less expensive it will be. Term life insurance is one of the least expensive options you can pursue and if you’re in relatively good health and don’t smoke, you can get an excellent premium that will secure you a significant amount of coverage. You can easily get a quote through a site like SelectQuote Life and get help making an informed decision not only about how much life insurance you need but how to buy it at a premium you can afford.

Protecting your family and your assets is one of the greatest gifts you can give to them. It’s never too soon – and it’s never too late – to look into buying life insurance or buying more life insurance.