A divorce changes your life. Not only does it undo a marriage, but it might also change the ways that you live. For example, did you know that Oklahoma residents could have to observe specific rules about life insurance after dissolution of marriage becomes final?
What’s life insurance for?
You didn’t think about divorce when you went to take out your life insurance policies. You wanted to protect your spouse from a financial hit in the case of your death. If there are children, you probably wanted to make sure that they could still go to college even if your regular financial contribution to the household goes away.
How dissolution of marriage affects the life insurance policies you have
During a divorce proceeding, you provide the court with proof of your income and assets. A life insurance policy is an asset. Moreover, it’s not enough to highlight currently active coverage, but also those policies you canceled in the last 90 days.
The type of insurance determines the best way to proceed
You might continue keeping term life insurance policies on one another. It’s a good way to protect the children in case of your demise. On the other hand, a cash value policy might be something you can cash out and divide.
It’s common practice for the court to require that the party paying child support to have a life insurance policy that names the child or children as beneficiaries. When the court orders you to pay alimony, you might also name your soon-to-be ex-spouse as a beneficiary. If you don’t already own a policy, it’s now time to get one.
Working out the details
As you know, the higher the amount of the policy, the more expensive it gets. You’ll need to negotiate a reasonable amount that you can afford. If there’s some disagreement, it might be in your best interest to discuss the issue with an attorney to figure out your next steps.