(PRWEB) December 04, 2013
A divorce can have many unforeseen consequences on a life insurance policy. Clients should know that life insurance plays an important part during divorce proceedings and it can be used in several ways. Since life insurance is not an asset, it cannot be divided between the two sides, but it can be used in other ways.
A life insurance policy belongs to the one who is paying the premiums. Usually, this means the insured, who is also the person on whose life the coverage has been issued. A life insurance plan should not be canceled before divorce proceedings as it can still be an important financial tool to protect your loved ones, such as children.
It is important however, to change the beneficiary. Recently divorced parents should provide financial coverage for their children. One way of doing this is by naming the children as the policy’s beneficiary. For better protection and more control over their money, policyholders should also open a trust fund and have the insurance money delivered there. The insured can then put several conditions like who can withdraw money from the fund and when and on what can the money be spent on.
Child support can come in the form of a life insurance benefit too. In many cases the court may decide to keep one of the spouse’s policy in order to protect the parent who has custody of the children. Single parents who have to support children, should ask the court to keep their ex-spouse’s policy active.
“Life insurance plays an important part during divorce proceedings and clients should be aware of any modifications that may occur!” said Russell Rabichev, Marketing Director of Internet Marketing Company.
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