MoneyGeek: “Life Insurance After a Divorce: Everything You Need to Know”

MoneyGeek, April 17, 2024 After a divorce, you might need to buy life insurance or update your existing policy. This process may include changing your beneficiary or cashing out a permanent life policy to divide the cash value with your ex-spouse.

This report by Mandy Sleight, which includes insights from Marguerita Cheng, CFP® Pro, you’ll learn that when you own life insurance and get divorced, it might require court-ordered life insurance changes. For instance, you may be required to keep life insurance on an ex-spouse, continue to list them as a beneficiary or buy a policy to cover the former spouse. If you have permanent life insurance, the settlement may require you to share part of the cash value with your ex.

“If there’s no alimony or child support requirement, consider updating your beneficiary to someone other than your ex-spouse,” Marguerita says. “Regardless of the changes a divorce causes, nothing will happen automatically. You must complete all updates and changes yourself and ensure they satisfy the terms of a court-ordered divorce life insurance agreement, if applicable.”


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