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 which fits your budget. 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.
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 these plans are much cheaper.
- 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 to 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, you need to buy a personal plan. 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. 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 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.
Our agents aren’t tied to a specific company. We can bring you a bunch of quotes all at once. Why make 60 calls to individual companies when you could make one simple call to us.
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. Don’t buy one of these plans before you weigh the pros and cons.
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.
The application process is much faster with no exam insurance. 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.
Now for the bad news, the cost. No exam plans are more expensive, much more expensive. If you want cheap life insurance, you have to take the medical exam, there is no around it.
Getting Affordable Life Insurance Coverage
Regardless of why you’re buying life insurance, you need to get the cheapest plan out there. You don’t want to spend more than you have to.
As we mentioned, working with one of our agents can save you cash. Each company offers different premiums, you need the one who has the lowest.
Aside from working with us, you can also make some daily changes which will save you money. First, cut the smokes. Cigarettes make your premiums double.
Next, get in shape. Go for a run, swim in the pool, ride a bike, do whatever it takes. If you to get put in a better health class, you need to have better health. It’s simple.
The most common health problem we see is being overweight. Lose some weight, it can but your premiums in half.
Not only should you try and lose weight, but you should also find a company who has experience with overweight applicants. These companies will offer cheaper life insurance because they have specialized their plans to protect these people.
Don’t wait any longer to get life insurance. Nobody can tell you what’s going to happen, and one of the best ways to protect yourself against the unknown is to have quality insurance in place. Let’s get started today.