In a divorce, life insurance is an important topic in settlement negotiations. If you and your spouse have children, retaining your policy ensures that any little ones are still provided for should either of you pass away. During this trying time, you need to make decisions with your kids and your own best interests in mind. Use the following guide to manage your life insurance during negotiations with a divorce lawyer. 

4 Tips for Managing Life Insurance During a Divorce

1. Change the Beneficiary

You may not want your ex-spouse to receive the death benefit in case something happens to you. Changing the beneficiary can be a sensitive issue, especially if you have children together. It is vital to consider their needs and future when deciding who should be the new beneficiary. 

You may want to designate your children as beneficiaries or set up a trust for their benefit. Discussing these options with your divorce lawyer can help you make an informed decision.

2. Consider Child Support or Alimony

If you have children together, child support and alimony are essential issues to consider during a divorce. Both child support and alimony are intended to provide financial support to the dependents of the divorcing couple. Life insurance can be a useful tool to secure these payments in case of the paying spouse's death.

If you are the paying spouse, you may want to consider purchasing a life insurance policy that covers the amount of child support or alimony you are obligated to pay. This way, in the event of your death, the payments will continue to be made to your dependents. 

3. Work the Cash Value into the Settlement

Many life insurance policies have a cash value that can be used in a settlement. The cash value represents the accumulated savings of the policy and can be a significant asset during a divorce. If you and your spouse have a high net worth, the cash value of your life insurance policy could be used to offset other assets.

4. Review Your Coverage Needs

If you had a joint policy with your spouse, you may need to purchase a new policy that reflects your current situation. Your coverage needs may have changed, and you may need more or less coverage than before. 

Working with a life insurance agent can help you assess your coverage needs and find a policy that meets your new requirements. Your divorce lawyer can also provide guidance on how your new policy should be structured to protect your interests.

If you are currently considering a divorce, reach out to Payne Law Office in Lincoln, NE. Their child custody and divorce lawyers can help make sense of your case and uphold the best interests of your and your children. They also offer mediation services, so you can attempt to reach a settlement out of court. Call (402) 477-7246 to learn more about how they can help you during this difficult time and schedule a free consultation.