Divorce decrees involving an ex-spouse to pay alimony or child support will usually require a life insurance policy in most states. Each decree is different depending on the marriage, lawyer, and the state. Regardless of the requirements, it’s important to find a policy that is actually capable of meeting the rules for providing life insurance required by divorce decree without leaving you in complete bankruptcy every 30 days.
Whenever someone is financially dependent on another’s earnings, an insurable interest is created, and the courts recognize this in divorce decrees. If you’re in this situation, it can be a frustrating and overwhelming process. Handling the divorce process and finding an affordable life insurance policy at the same time can be a very challenging task.
Nevertheless, a life insurance plan can be one of the best investments you can make for your loved ones, regardless of your marital status or the reason why you’re buying the plan. And if you do the research needed, getting an affordable coverage can be an easy task. In this article, you’ll be provided with several tips and hints to help you look for the best life insurance for a divorce decree.
Tips for Finding Good Coverage
Before we go deep into the waters, let’s make sure you’re aware of what to do in order to find a great life insurance policy regardless of any divorce conditions given:
- Purchase a Term Life Insurance Policy
Knowing that commonly budgets are tight after a divorce process, a term life insurance policy will be the most affordable option among all life insurance options. Since term life policies are not a permanent form of coverage, premiums are always less. Certainly, term insurance will be the best option for life insurance required by Divorce Decree when there are some budget restrictions.
But careful! If you’re a parent, then you have to make sure the term length covers the specific period of time of child support or alimony obligation. This way if something happens, your children will keep receiving support until they are old enough to look for a job.
- Transferring Policy Ownership to the Person Receiving the Alimony or Child Support
We encourage the idea of people receiving alimony or child support to be the owners of the policy, regardless of the fact that the ex-spouse is the one insured and who’s actually paying for it. This way there will be no worries about a beneficiary being changed or the policy lapsing.
Parents would be notified as the owner of the policy if there’s a lapse, and beneficiary changes can only be processed from the owner. This won’t happen unless it’s negotiated into the Divorce Decree.
- Life Insurance Provided by your Employer Won’t Suffice
Although employer life insurance is a great benefit for additional coverage, it usually doesn’t satisfy the requirements for a divorce. You’ll have to buy a policy anyway and leave the insurance provided by your employer as an extra coverage.
In addition to that, if you ever want to use this as the only life insurance plan, it’ll have to be stated in the decree. This action is rarely allowed because leaving your job cancels your employer life insurance and leaves those who depend on the alimony and child support uncovered.
Life Insurance Policies for Divorce Decree that don’t Require Medical Exams
Sometimes pre-existing health conditions can be extremely problematic when you’re trying to get a life insurance. A great alternative for life insurance coverage is to buy a no medical exam insurance plan. This way you’ll be able to buy a life insurance that doesn’t require you to take a medical exam.
However, let’s see the advantages and disadvantages of getting a life insurance policy for Divorce Decree that doesn’t require a medical exam:
Advantages:
- You won’t have to worry about being declined for coverage to meet the divorce decree requirements due to any pre-existing health conditions such as someone needing life insurance for diabetics.
- As there’s no reviewing of medical results, these plans are approved much faster than traditional life insurance policies. It usually only takes a few days.
Disadvantages:
- These plans are more expensive than traditional plans. The main reason traditional insurance plans request a medical exam is to determine how risky it is to insure you. Since they don’t have one, they will offset the risk by charging more money per month.
- It may be suspicious not wanting to go through a medical examination.
How to Get an Affordable Life Insurance Plan
Getting an affordable life insurance plan for your Divorce Decree is not that difficult. You only need to make a few changes to your current lifestyle, and you’ll be saving a lot of money by keeping your premiums under control.
A key element to becoming a “low-risk policy holder” is to cut out any tobacco consumption since smokers have an added risk that skyrockets their premiums. A smoker can even pay two times the price of a non-smoker.
Some other tips you can take into account when looking for a decrease in your life insurance plan are:
- Having a healthy diet.
- Exercising regularly.
- Keeping an eye on your levels, don’t consume too much fat since it will affect your cholesterol.
- Trying to stay at a healthy weight. People in their ideal weight range pay substantially less than overweight people.
Also, if you love extreme sports, it can be a big drawback. If you happen to be that guy who likes to go parachuting and skydiving every other weekend, you’ll be considered a high-risk applicant because of your dangerous hobbies. So, if you’re addicted to adrenaline, you’ll have to make sure your wallet is ready to pay the price. Otherwise, you can always look for other hobbies. Safer ones!
And, as previously mentioned, if you don’t want to go through any of these you can always get a no medical exam insurance plan for your Divorce Decree. But remember, the quotes are going to be significantly higher than in a traditional plan!