Even in divorces that seem to run smoothly, spouses must attend to countless details. When dealing with custody arrangements, disposition of the marital home and other vital matters, it’s natural that life insurance might not be a pressing concern. Even so, ending your marriage might lead you to revise an existing policy and obtain new coverage.
In a divorce, courts commonly require a party who will be paying alimony or child support to purchase life insurance. This gives the recipient spouse the security of knowing that they will be able to meet their financial needs of themselves and their children even if their ex dies prematurely. Typically, the recipient will own the policy or be named irrevocable beneficiary so they will be notified of lapses or changes in coverage. Conversely, the paying ex-spouse is the insured. Responsibility for paying premiums should be decided during the divorce proceeding.
If you have a life insurance policy with your husband or wife as the beneficiary, New York Law generally revokes that designation following a divorce. Benefits are distributed as if the insured’s ex-spouse predeceased them. Still, you should take steps to change your life insurance beneficiary if you are ending your marriage. There are situations where someone wishes to keep their former spouse on the policy even after a divorce. Actively changing the beneficiary should eliminate the potential for confusion and conflict over your true intentions after you are gone.
You should also remember that cash-value policies (whole life, universal life) have a measurable surrender value and are often included in the marital estate for division. Even term policies can have economic value if they are required by the divorce decree.
As the Long Island divorce leader, Bryan L. Salamone & Associates, P.C. understands all aspects of the New York marriage dissolution process. This includes matters that sometimes overlooked, such as life and health insurance coverage. Whatever your situation entails, you can rely on us to guide you toward a resolution that covers all the critical concerns. To make an appointment with a knowledgeable New York family law attorney, please call 631-388-6009 or contact us online.