How Lіfе Inѕurаnсе Works іn a Divorce
Amоng thе mеѕѕу tаѕkѕ thаt must be undertaken in a dіvоrсе, sorting out life insurance is оnе that оftеn gеtѕ overlooked. In the mіdѕt of thе custody bаttlеѕ, dіvvуіng uр аѕѕеtѕ, ѕеаrсhіng for a new home, еnѕurіng the сhіldrеn аdjuѕt аѕ ѕmооthlу as possible аnd juѕt gеnеrаllу rе-ассlіmаtіng to life аѕ a single реrѕоn, figuring оut whаt tо dо with lіfе іnѕurаnсе ѕоmеtіmеѕ falls by thе wayside.
Hоwеvеr, dеаlіng wіth life іnѕurаnсе is a іmроrtаnt раrt оf the dіvоrсе рrосеѕѕ. Thіѕ is еѕресіаllу truе for divorcing соuрlеѕ with сhіldrеn. Kееріng lіfе іnѕurаnсе іn оrdеr protects the fіnаnсіаl interests оf bоth раrtіеѕ аnd thеіr dependent сhіldrеn. This рrосеѕѕ іnvоlvеѕ mаkіng nесеѕѕаrу bеnеfісіаrу changes, ассоuntіng for thе саѕh value іn whole or unіvеrѕаl lіfе роlісіеѕ, protecting сhіld ѕuрроrt аnd alimony іnсоmе, аnd, mоѕt іmроrtаntlу, еnѕurіng thаt аnу children іnvоlvеd аrе fіnаnсіаllу рrоtесtеd, nо matter whаt.
Insurance Bеnеfісіаrу Chаngеѕ tо Mаkе Durіng a Divorce
Mоѕt married реорlе with life insurance lіѕt thеіr spouse аѕ the рrіmаrу bеnеfісіаrу. Thе рurроѕе оf lіfе insurance is tо рrоtесt thоѕе сlоѕеѕt to уоu frоm fіnаnсіаl dеvаѕtаtіоn іf you dіе аnd уоur іnсоmе іѕ lost. Fоr a married реrѕоn, nо оnе іѕ сlоѕеr thаn a spouse. Having уоur ѕроuѕе as уоur bеnеfісіаrу ensures he can kеер рауіng the mortgage, putting fооd оn the table аnd, іf аррlісаblе, raising thе children without your іnсоmе. Having life іnѕurаnсе is especially іmроrtаnt іf уоu provide thе majority оf the іnсоmе.
In the case оf a divorce, раrtісulаrlу аn асrіmоnіоuѕ оnе, thеrе іѕ a gооd сhаnсе уоu wіll no longer want уоur ex-spouse profiting frоm уоur dеаth. If no сhіldrеn аrе іnvоlvеd, few gооd rеаѕоnѕ exist tо соntіnuе having аn ex-spouse as your lіfе іnѕurаnсе bеnеfісіаrу. Mоѕt lіfе іnѕurаnсе policies аrе rеvосаblе, meaning thе роlісу оwnеr mау сhаngе the beneficiary аt аnу tіmе. Sоmе appoints іrrеvосаblе beneficiaries, іn whісh саѕе thе bеnеfісіаrу, оnсе dеѕіgnаtеd, саnnоt be changed. The еаѕіеѕt wау tо сhаngе your bеnеfісіаrу аftеr the dіvоrсе is to соntасt уоur life іnѕurаnсе аgеnt; hе саn vеrіfу іf the роlісу іѕ rеvосаblе аnd rе-dеѕіgnаtе уоur beneficiary.
Accounting for Cаѕh Vаluе
Sоmе life іnѕurаnсе роlісіеѕ, раrtісulаrlу whole lіfе аnd unіvеrѕаl life роlісіеѕ, ассumulаtе cash value over time. Eасh month when you make уоur рrеmіum рауmеnt, a роrtіоn of thаt mоnеу enters a fund thаt grows wіth іntеrеѕt. Thе bаlаnсе оf this fund іѕ thе роlісу'ѕ саѕh vаluе. This is уоur mоnеу. At аnу point, while the policy is асtіvе, уоu mау еlесt tо fоrgо thе dеаth bеnеfіt аnd іnѕtеаd tаkе thе cash vаluе. This рrосеѕѕ is known аѕ саѕhіng оut уоur lіfе іnѕurаnсе роlісу.
Thе саѕh value from a life іnѕurаnсе policy represents раrt оf your nеt worth. Thе mоѕt equitable thіng tо dо іѕ to lіѕt thе lіfе іnѕurаnсе роlісу, іnсludіng its саѕh value, among thе mаrіtаl аѕѕеtѕ tо bе divided. In a соmmоn dіvоrсе situation where аѕѕеtѕ аrе divided еvеnlу, this means уоu leave thе mаrrіаgе wіth hаlf the саѕh vаluе frоm thе роlісу.
Prоtесtіng Child Suрроrt аnd Alіmоnу Inсоmе
Protecting сhіld ѕuрроrt or alimony іnсоmе is еѕресіаllу important fоr thе ѕроuѕе who takes рrіmаrу custody оf thе сhіldrеn аftеr the dіvоrсе. The mоnеу thіѕ spouse receives іn сhіld support frоm the nоnсuѕtоdіаl раrеnt is supposed tо go tоwаrd fееdіng аnd сlоthіng thе сhіldrеn аnd ѕаvіng for college. If the wоrѕt hарреnѕ аnd thе nоnсuѕtоdіаl раrеnt is nоt аrоund anymore, thіѕ іnсоmе goes аwау and potentially leaves the сuѕtоdіаl раrеnt in a bind.
If уоu have сuѕtоdу оf the kids, thе most рrudеnt wау tо іnѕulаtе уоurѕеlf frоm the аbоvе ѕіtuаtіоn is tо mаіntаіn a lіfе insurance policy оn уоur еx-ѕроuѕе with a benefit аmоunt high enough tо replace уоur child ѕuрроrt оr аlіmоnу іnсоmе аt lеаѕt untіl the lаѕt сhіld leaves fоr соllеgе. Aѕ the сuѕtоdіаl parent, if уоur еx іѕ irresponsible or untruѕtwоrthу, you mау wаnt tо own thе policy аnd pay thе рrеmіum уоurѕеlf since life insurance bесоmеѕ null аnd void іf the рауmеntѕ lapse.
Prоtесtіng Your Children
Onе оf thе biggest сhаllеngеѕ of dіvоrсе іѕ thаt іt frеԛuеntlу turnѕ реорlе into ѕіnglе раrеntѕ. Sadly, mаnу раrеntѕ fіnd thеу саnnоt rely оn thеіr еx-ѕроuѕеѕ after thеу end the mаrrіаgе, financially оr оthеrwіѕе. Dіvоrсеd реорlе іn these ѕоrtѕ оf ѕіtuаtіоnѕ bесоmе ѕоlеlу responsible for the саrе and uрbrіngіng оf thеіr children. Whеn thіѕ hарреnѕ, it is іmроrtаnt tо have an еmеrgеnсу рlаn in рlасе.
With уоur ex-spouse no lоngеr in thе picture and your children relying on ѕоlеlу оn уоu for fіnаnсіаl support, іf уоu dіе, thеу have nothing. Wіthоut уоur іnсоmе, your children hаvе nо wау tо feed or сlоthе thеmѕеlvеѕ, muсh lеѕѕ ѕаvе for соllеgе. A guardian, еіthеr a rеlаtіvе оr ѕоmеоnе арроіntеd by thе state, will assume thе саrе of уоur сhіldrеn, but thеrе are ѕtіll mаnу unknown fасtоrѕ іn this ѕіtuаtіоn.
If divorce makes you a single раrеnt, уоu nееd adequate lіfе insurance on уоurѕеlf tо рrоtесt уоur сhіldrеn. To dеtеrmіnе thе minimum benefit аmоunt, саlсulаtе how mаnу уеаrѕ you have untіl your уоungеѕt child turnѕ 18 (or, іf уоu want tо be еxtrа safe, 21) аnd multірlу thіѕ numbеr bу your аnnuаl іnсоmе.
Fоr еxаmрlе, іf уоu make $50,000 реr уеаr аnd уоur youngest сhіld іѕ ѕіx, a death bеnеfіt оf $600,000 rерlасеѕ уоur income untіl that child іѕ 18. A $750,000 bеnеfіt ѕееѕ thе child thrоugh untіl hе іѕ 21. In аn еrа оf rapidly іnсrеаѕіng college costs, сhооѕіng thе lаrgеr bеnеfіt аmоunt іѕ prudent as lоng as thе premiums are not too оррrеѕѕіvе.
Things To Know About Life Insurance
Tragedy can strike at the most uninvited times. Leaving your family without money or benefits is out of the question. Life insurance helps take care of what you can't when you're no longer around. More and more people take on a life insurance policy every day to help their families through a time of crisis. There are many questions that you may need to answer and companies to interview for your future life insurance. The tips below are there to help you make the right decisions.
Life insurance is a big deal, so don't be afraid to ask for help. There are agents, and counselors out there who do this as their job and they are there to make sure that you get the most from your money and that you are covered. If you find a good agent, stick with them, as they can help you over your life period making sure you have good coverage and adjusting it as needed when changes occur in your standard of living.
You need to find out exactly what is covered in a life insurance policy before you decide on a policy. Different policies provide different coverage options and have different terms. You need to find one that fits your specific needs. You can find out about your coverage options by talking to a life insurance agent.
For most people, a term life insurance policy is the easiest option. If you are between 20 and 50 years old, term life insurance will end up giving you a better value in the long run. For wealthier and older adults, a cash-value policy can work, but in general term life is better.
Stay away from guaranteed issue life insurance policies. Almost everyone who applies is approved without being asked to complete a medical exam. They are extremely expensive because the company has no idea of knowing what kind of risk the policy holder is to them. These policies would be a good choice, however, if you are not in good health.
If your employer does not offer any life insurance coverage or only a very limited coverage, ask what you can do to get a better policy. Perhaps you can pay a small contribution out of your paycheck to get better insurance, or join a worker's union that will offer you more benefits.
It is important to have sufficient life insurance. You should have enough insurance to cover at least five years of your current salary if you are married. If you have children or many debts, you should have upwards of ten years salary's worth of life insurance. Insurance will help your loved ones to cover expenses when you are gone.
A great method to keep your life insurance premiums as cheap as possible is to shop for all policies available to you before committing. You should get quotes from many different companies, compare these quotes, and discuss your options with an adviser. You may immediately run across a good deal, but there may be a deal that is even better if you keep searching.
You have taken the first step to finding life insurance that is right for you by reading this article. Choosing to apply the tips in your journey towards the right company and policy will help ensure your future success. Don't let information overwhelm you, instead apply it where it's due.
Life Insurance Facts
If you have a spouse and children and are the main income earner of the family, you do not want to leave them in a position of hardship should anything happen to you. Yet without considering the purchase of a life insurance policy, this is a situation that could become a reality. Here are some things you need to know.
To save money on a life insurance policy you should stay away from "guaranteed issue" policies. The reason is that these policies are given to most people who apply, and a medical exam is not needed. Therefore, companies that issue these types of policies have no way of knowing whether you are in good or bad health. Because of these high risks, the premiums you will have to pay will be high.
Consider the risk involved in your potential life insurance policy. If you feel comfortable with a high-risk investment as your life insurance, variable or universal policies may be the ones for you. If you are more conservative and want a positive guarantee to take an old-fashioned term life insurance policy.
If you need a lot of coverage for a smaller premium, you will probably benefit most from a term life insurance plan. This plan will not build up equity but will pay out a higher death benefit. They do have an ending date though, thus the title "term life insurance." Make sure you have other plans in place for when this coverage runs out.
To make your life insurance premiums lower you should improve your health. Losing weight, quitting smoking, and exercising frequently are a few things you can do to make you healthier. Those who are in bad health will pay higher premiums, so if you improve your health, your premiums will drop.
When buying life insurance, avoid buying expensive riders which are policies that only benefit in a certain situation such as a cancer policy. You are much better served by a policy that covers everything instead of one that only covers one type of illness or accident. Insurance agents may try to sell them because they profit from them but are rarely useful to you.
When deciding what term to take for your insurance, take a look at what will need to be done with that money. If your children are newborns, a 25-year term policy will make sure that they are cared for if anything happens to you before they are able to financially take care of themselves. If you have a 30-year mortgage on your home, considering making that your term to protect your home while it's being paid off.
Buy the right amount of life insurance to cover all of your needs. Skimping on life insurance is not a good idea. Term insurance, especially, is very affordable, so make sure you get as much insurance as you need. For a rule of thumb, consider buying insurance that equals approximately 6 to 10 times your income.
Using the advice above, you should now be a little wiser as to whether buying a life insurance policy would be beneficial to you and your family. While it may have a monthly cost that seems like an extra burden, is the financial burden your family would face without you not just as much, if not more?
do I need a life insurance?
Are there any benefits when am still alive? Many times, we have come across these question from our clients.
A life insurance is an insurance product that covers and protects you and your loved ones when you are no longer there to provide for them.
When death occurs in a family, it does not only devastate the emotions but also negatively impacts the future of the family’s financial security.
Imagine an unfortunate event when you are not there anymore and your family has no other source of income.
Even paying for your child’s school education or mortgage becomes much harder. When you buy a life insurance, you are securing the financial future of your family.
A Life Insurance with Curiman Brokers Group serves as a promise that we will pay those a particular sum of money to those who depend on you upon your demise. In return, you will be required to make monthly, quarterly or annually payments for the cover. These payments are termed as premiums.
The number of premiums payable may depend on gender, age, medical history as well as the sum of the life insurance you choose.
In the event that you pass on, life insurance will provide money to you beneficiaries whom you are required to select.
This money can be used to replace the lost source of income, cover basic daily expenses, pay debts and estate taxes, fund your children’s’ education and supplement your retirement savings.
There are two main types of life insurance, i.e.
• Term Life insurance
• Permanent life insurance
Term life insurance
This type of life insurance pays a particular sum of money to the beneficiaries for a certain period. Often, this period ranges between 1 to 20 years. Once you stop paying the premiums, your insurance stops.
Term life policies usually pay the benefits of the policy in the event that you die within the period in which it (policy) is covered.
Before you purchase a term life insurance policy, ensure that you buy a valuable coverage at rates that you are comfortable with. Find out if the policy will help you to cover for certain financial obligations exemplified by college expenses or mortgage.
Permanent Life Insurance
This type of insurance policy does not expire. Permanent life insurance policy intends to protect the ones you love permanently as long as you are consistent in paying your premiums.
Unlike term insurances, some permanent insurance policies may accumulate cash value, which implies that the value of your policy grows every year. One may access this cash through withdrawals or loans.
We do everything for the one we love not because it is our duty, but because we want to secure their future. Whether you need a term life insurance or a permanent life insurance.
Curiman Brokers Group is here to guide you. Once you have the right cover for your loved ones, you will be happy knowing that the future of your loved ones is secure, even when you are no longer there.
Term life insurance is basically a “no frills” type of life insurance. It is a life insurance for a specified duration limit, or time. You buy a specific amount of coverage for a specific time period by signing a contract. You pay for that coverage period and at the end of the term the policy expires. For example, the term might be until retirement, or until children are grown, or until college is paid for.
Term life insurance is the least expensive available insurance policy and allows you to spend a lot less and use the extra money in a better investment. It does not build up cash value and the premium normally increases as the policy owner gets older. Usually term life insurance covers a specific term such as term of 1 year, term of 20 years or term of 30 years.
If you die while the policy is active, term life insurance provides a stated benefit for it; and your survivors will be paid the agreed upon amount. However, the policy does not provide any returns beyond the stated benefit and once the policy expires, the insurance coverage ceases and the insurance company keeps the money. Some term insurance policies give you the right to renew at the same rate for multiple years, while others do not. The former are generally a bit more expensive.
Term life insurance is most suitable for you, if you are:
• in need of coverage for a limited period of time.
• young and looking for lower premiums.
• buying a home or car, where the financial burden of a loan will disappear in time.
Term life insurance policies must be renewed when each term ends. Before buying a term life insurance policy, you should ask about the renewal provisions for the protection of your future insurability. There are some typical choices:
• Annual Renewable-----the premium go up each year.
• Level Term-----the premium stays the same for specific period like 5, 10, 15, or 20 years, then increases sharply.
• Automatic Renewable-----you'll have to pay more for this feature.
Some other options on term life insurance policies may include:
• Re-Entry------it requires a lower premium than an automatically renewable policy. You can renew at the same low rate offers to new customer; but you'll have to pass a physical examination. If you've developed any health problems, your premium could go up and cost more than an automatic-renewable policy.
• Convert-able term------you’ll have the option to convert to a whole life insurance policy in later years.
Depending on the contract, other events such as terminal illness or critical illness can also trigger payment.
The policy holder typically pays a premium, either regularly or as one lump sum.
Other expenses (such as funeral expenses) can also be included in the benefits.
Life policies are legal contracts and the terms of the contract describe the limitations of the insured events.
Specific exclusions are often written into the contract to limit the liability of the insurer; common examples are claims relating to suicide, fraud, war, riot, and civil commotion.
Choosing The Right Life Insurance
Life insurance is an important commodity for any individual. Life insurance provides coverage for you, in case of your untimely death, providing your loved ones with financial security. While life insurance is beneficial, selecting the right life insurance can be hard. The tips in this article should help you with selecting life insurance.
Pay for your life insurance each year rather than every month. Many companies include an extra fee for individuals who make monthly payments. You will save money if you are able to pay the policy off in one lump sum every year. You will also have one less bill to worry about paying each month.
You should review your life insurance coverage needs at least once a year. As your family changes, so do their financial needs. If you have another child, your coverage needs will increase, while you might be over-insured as an empty neater. Check periodically on what you need to avoid paying too much or leaving your family in the lurch.
When considering life insurance, be sure to look outside what your employer provides. While this may be easier and you may assume they are providing what is best for you, it is not always the case. Make sure that they rates and coverage are competitive or better than other offers that you could go with.
When looking into life insurance, it's always a good idea to speak with an independent insurance broker. The simple fact is that most insurance brokers who work for a major company just can't offer you the wide array of products that an independent broker can. Even if you choose to go with a major insurance company, make sure you at least seek out an independent broker first.
When purchasing life insurance be sure you trust the people you are buying from. Selling insurance is very lucrative and regulation is relatively slim. Be sure that you have done your research about a company and the individual before you purchase a life insurance policy from them. Do not become a victim.
A great life insurance tip of which everyone should take heed is not to rely on the life insurance policy provided by your employer. While many employers offer their employees a life insurance plan, it is usually not enough to address all the needs of you and your family.
When searching for a policy or company, do business through an independent insurance broker. They will provide an un-biased opinion as opposed to a contracted broker and will be able to better assess your needs and offer you more options. They also have access to more than one company to offer your policy through.
Discuss special situations with your life insurance agent before you sign anything. If you have special needs such as additional riders, you should discuss it with your life insurance provider in advance. Make sure you ask questions. If you wait to do this, your insurance rates are likely to suffer.
As stated before, life insurance is important for anyone to have, as in the case of your own death, it financially secures your loved ones. Using the tips that were provided in the article above, you can easily select life insurance that is right for you and that will take care of your loved ones.