Divorce decrees that involve an ex-spouse to pay alimony or child support will typically require a life insurance policy in most states. Each divorce decree is going to be different based on the marriage, lawyer, and the state that it’s in. Regardless of the requirements, it’s important that you find a policy to meet the requirements that doesn’t break your bank every month.
Whenever someone is financially dependent on another’s earnings, an insurable interest is created and the courts recognize this in divorce decrees.
If you’re in this situation, it can be frustrating and overwhelming process. You’re trying to handle the divorce process, and on top of that, you have to find a life insurance policy that you can afford. This can be an emotional time depending on how the marriage has ended, but luckily, it can be very easy to get affordable life insurance coverage.
Life insurance can be one of the best investments that you make for your loved ones, regardless of your marital status or the reason that you’re buying the plan. This article is going to explore several tips that you should be aware of when you’re looking to get insurance coverage for a divorce decree.
Here are 3 important tips if you’re looking for life insurance required by your divorce decree:
- Purchase a term life insurance policy. Budgets are typically tight after a divorce and term life insurance is the least expensive option and will ensure the premiums stay fixed. Just make sure the term length will cover the specified amount of time of the child support (if you're a parent) or alimony obligation. Not only can you buy a term insurance plan that will meet the length required for alimony, but a term insurance policy is going to be much more affordable than other insurance options.Because term life insurance is not a permanent form of coverage like a whole life plan, your premiums are going to be drastically less. If you want to get the cheapest coverage to meet the requirements, term insurance is going to be the best option.
- Transfer the owner of the policy to the person receiving the alimony or child support. We recommend the person receiving the alimony or child support be the owner of the policy (even though the ex-spouse is the one being insured and paying for it) so they don’t have worry about a beneficiary being changed or the policy lapsing. They would be notified as the owner of the policy if there's a lapse; and beneficiary changes can only be processed from the owner. This won't happen unless it's negotiated into the divorce decree.
- Your employer provided life insurance won’t suffice, purchase an individual life insurance policy. Depending on your state’s laws, a divorce will automatically remove your ex-spouse as beneficiary. If you wish to use your employer provided life insurance, it must be stated in the divorce decree (good luck with that!). This is rarely allowed because leaving your job cancels your employer life insurance and leaves those who depend on the alimony and child support at risk. Employer life insurance is a great benefit for additional life insurance coverage, but it will almost never satisfy the requirements for a divorce. When you’re shopping for life insurance coverage for the decree, your employer life insurance plan will have little impact on how much coverage you will need to buy.
The best resource for additional information about obtaining a life insurance policy required by a divorce decree is to speak with an independent life insurance agent who has worked with divorce decree required life insurance and knows the process.
We know that getting a quality insurance plan while you’re going through a divorce can be difficult, and you don’t have the time to research all of the available companies, but that’s where our independent insurance agents come in. Unlike a traditional insurance agent, our independent brokers work with dozens of highly rated companies across the nation, which means that they can bring all of the lowest insurance rates directly to you. Every insurance company is different, and all of them are going to offer you drastically different rates depending on which company that you get the quote from. Instead of wasting your time calling dozens and dozens of companies, let our agents do all of that hard work for you. We can bring all of the best plans and help you decide which one is going to work best for you as well as meet the requirements for the decree.
No Medical Exam Life Insurance
One alternative for life insurance coverage is to buy a no medical exam insurance plan. These plans will allow you to buy life insurance without being required to take the medical exam. There are several advantages and disadvantages that you should be aware of when you’re shopping for insurance coverage.
With a no medical exam plan, the medical underwriting is less strict, which means that if you’ve been declined in the past, or you have any pre-existing health conditions such as someone needing life insurance for diabetics, you won’t have to worry about being declined for coverage to meet the decree requirements.
Another advantage to these plans is that you can be approved much faster with a no medical exam than you can with a traditional life insurance policy. Because you won’t have to wait for the insurance company to review your medical results, you can be approved in a matter of days. This is much faster than the month that it could take with a traditional plan.
One of the significant drawbacks of these plans is that they are going to be more expensive than a plan that requires a medical exam. The purpose of the medical exam is to give the insurance company an idea of what your overall health is, to help determine how much to charge you for coverage. Without that medical exam, the company is taking a great risk to insure you, and they are going to offset that risk by charging you more every month. If you want to save money on your insurance plan, you’ll need to apply for a traditional policy.
Getting Affordable Life Insurance Coverage
Before you apply for life insurance, it’s important that you make a few lifestyle changes. Making a few changes could help you save thousands of dollars on your life insurance plan. One of the most common reasons that people don’t buy life insurance is because they assume that it’s going to be too expensive, but in most cases, that couldn’t be further from the truth.
If you want to save money on your life insurance premiums, the first thing that you should do is cut out any tobacco that you currently use. If you’re a smoker, you should expect to pay much higher premiums because of the added risk. In fact, smokers are going to pay twice as much for life insurance versus what a non-smoker is going to pay. If you want to get the most affordable life insurance possible, you’ll need to kick those bad habits once and for all.
The next thing that you should do to save money is improve your overall health. Before the insurance company approves your application, they are going to require that you take a medical exam, and the results of the exam are going to play a major role in how much you pay every month for your plan. Getting better results from the exam are going to translate into lower monthly premiums.
The two best ways to get better results are to get regular exercise and stick to a healthy diet. Both of these are going to help you lose weight, lower your blood pressure, lower your cholesterol, and reduce your risk of being diagnosed with any other health complications. If you’re overweight, you’ll pay around 50% more than a person that is in a healthy weight range.
Another way to save money on your coverage is to cut out any dangerous hobbies that you enjoy. If your like to scuba dive or go skydiving on the weekends, you’ll be considered a “high-risk” applicant because of your hobbies. If you want to save more money on your life insurance plan, you’ll need to find safer hobbies or find a company that is going to view your hobbies more favorably.
We know that buying life insurance is not the most fun process, especially if you’re buying insurance coverage to meet a requirement from a divorce, but our agents are here to make the process as quick and simple as process. Regardless of why you are buying life insurance, it’s an important investment that will ensure that your loved ones will have the money that they need, regardless of what happens to you. It’s our mission to ensure that you’re getting the best insurance as quickly as possible.