Few things last forever, which is why many couples invest in life insurance to cover their loved ones in the event of their passing. But how is your life cover affected after you’ve gone through a divorce?
Lee Bromfield, CEO of FNB Life, says partners should factor in unfortunate circumstances like a divorce when taking out life insurance for their families, especially if there are children involved. He unpacks five options available to couples after a divorce:
- Changing beneficiaries: If you are no longer financially dependent on each other, you should review and update your beneficiary details to ensure that the correct beneficiaries are paid out.
- Banking details: If you shared a joint account, be sure to update your banking details with your insurance provider to prevent premium lapses and dishonoured policies. Renewing a lapsed policy may result in a revised premium. If you are financially dependent on your soon-to-be ex, it is advisable to discuss taking over premium payments or another way forward.
- Financial needs of children: Both parties must reach an agreement to financially protect any children should in the event of one or both parents’ deaths, based on your individual circumstances, as well as estate planning arrangements.
- Sum insured: Your financial situation may change after a divorce, making it necessary to adjust your life cover amount to cover any shortfall.
- New policy: Individuals who did not have a policy of their own while married should now consider taking out their own policy.
Failure to review and update your life policy after a divorce, may not only lead to family disputes and costly legal battles, but those who are dependent on you in financial distress.
Source: FNB. Images: Pixabay