When couples get married, meeting with their insurance agent and aligning coverages is very common.
But important insurance changes are often overlooked while going through a divorce. These oversights can create some serious hardships for families left behind after unexpected deaths.
These issues can be avoided if timely actions are taken.
As a general rule, it is a good idea to re-designate life insurance beneficiaries after a divorce to ensure any death benefits are paid to the individual that the insured intended. Most regulations allow beneficiary designations dated after the divorce date to stay intact. Ohio’s law can be seen here.
Did you know that more than half of all states have enacted some version of automatic beneficiary revocation upon divorce?
Many states recognize that couples tend to overlook insurance during divorce and have enacted laws that automatically revoke a former spouse as beneficiary of life insurance policies. This means that if your client wishes to leave a former spouse as beneficiary to receive death benefits, they may need to complete a beneficiary change form after the divorce.
Are children involved and is the intent to leave the former spouse as the beneficiary to care for the children?
If so, ensure the formers spouse is re-designated as beneficiary after the divorce date with the relationship noted as ex-wife, or ex-husband.
Does the divorce decree specify how the life insurance policies should be handled?
If the divorce decree specifies how the life insurance policies should be handled, it is important that the beneficiary changes match the decree. Most state beneficiary revocation regulations take divorce decrees into account. This could mean a change of ownership, a re-designation of a former spouse as beneficiary, or another change ordered by the court is necessary.
The court may not specifically spell out how to update the policy but may address who should have authority over the policy or receive the proceeds. The policyholder should still take necessary actions to update the policy as needed.
Divorced years ago, but forgot to update your beneficiaries?
That could get ugly. Now is the time to act to help prevent family members from having to be involved in a legal battle. With or without state divorce revocation laws, it’s important to update your beneficiaries post divorce to ensure death benefits end up going where they were intended.
For more information, a full life review, or quotes on your life, home, autos, business, or other – contact Beck Insurance Agency in Archbold or Whitehouse, Ohio. Call 419-446-2777, email us at email@example.com, or click here to submit your request.