Life Insurance Questions & Answers: Life Events
Life Events Q&A
Showing 2 questions
How often should someone review or update their life insurance policy?
You should review your policy with your insurance agent at least once per year. Different life changing events can cause your insurance needs to change. You may need more or less depending on your circumstances. Another important aspect is to make sure your beneficiaries are up to date. Changes in family dynamics may make you want to change beneficiaries. Remember, whoever's name is on the contract will receive the proceeds from the policy.
What happens to your life insurance policy in a divorce?
Divorce can have a major impact on life insurance, and many people forget to update their policies afterward.A few things to know:
Your ex-spouse may still be listed as the beneficiary if you never change it
Some divorce agreements require life insurance to stay in place for child support or alimony obligations
Ownership of certain policies may need to be transferred as part of the settlement
Cash value life insurance can sometimes be considered a marital asset
One of the biggest mistakes people make after a divorce is assuming everything updates automatically — it doesn’t.
After a divorce, it’s smart to review:
Beneficiaries
Policy ownership
Coverage amounts
Trusts or contingent beneficiaries
Any court-ordered insurance requirements
A quick policy review after major life changes can prevent a lot of problems later.
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