- No one wants to think of Divorce, but if you do have to go through this there are so many issues to work through that people often overlook what protection you might need. Arranging the right type of protection insurance can seem like a bit of a maze.
Do you need to cover Maintenance Payments?
- If one party pays regular maintenance payments to their ex-spouse, their payments will inevitably cease should they pass away. A life insurance policy can be set up on a ‘Life of Another’ basis. This means that the payee is insured but the ex-spouse legally owns the policy. If the payee passes away, the policy proceeds are paid to the ex-spouse, thus replacing the maintenance payments.
Do you have a marital home?
If so there are several scenarios, depending on your financial status.
- Will you have to sell the home and divide the equity?
- Will one move out and purchase another home, or if unaffordable, possibly rent or live with family or friends?
- Will you both stay in the same home until you can split the property?
Whatever your solution it is important to consider what would happen if either of you passed away or became ill.
Arranging a Trust
- It is important to put your policy in a Trust when taking out life insurance to offer financial security to dependent children.
- There is no legal requirement for the proceeds of a life insurance policy to be paid automatically to a divorced spouse.
Trusts are not regulated by the Financial Conduct Authority.
