Reassess your need for life insurance
After a divorce, it is wise to reassess your life insurance needs. Take a close look at those around you and think about how they would be impacted financially in your absence.
If you have children, do your best to estimate how much they would need for their well-being until they can care for themselves. Run the numbers on your own or use an online life insurance needs estimator.
Be sure to seek guidance from an attorney before buying or changing life insurance coverage, so that you can be sure to act within the guidelines of your divorce agreement. For instance, you may be required to carry a specific level of coverage until your children reach a certain age.
Think twice before changing your beneficiary
Proceed with caution before removing your former spouse as beneficiary — especially if you have children together. Doing so may inadvertently result in your children not getting the financial assistance they deserve.
Additionally, your divorce decree may require you to keep your former spouse as a beneficiary for a period of time.
Tips for naming a beneficiary if you have minor children:
- In many states minor children cannot receive life insurance benefits
- Consider a responsible adult who will care for your children
- Seek legal guidance as to whether you should set up a trust as the beneficiary