In an increasing number of Tennessee divorces, it’s compulsory that you purchase and maintain a life insurance policy. This is needed for child support and alimony in the event that the main provider of the family was to pass away while either of these are still owed.
Child support and alimony
If you’re unsure of where to begin in your hunt for the right life insurance policy, there are a few good places to begin. One is to consider how much child support or alimony is owed to the point at which the lastborn child reaches adulthood.
Once it has been established that one or both parties are required by the divorce decree to have a life insurance policy, it’s helpful to remain open and communicative through the application process. If you’re all on the same page, it will likely make it easier to find the options that work best for everyone.
Each party’s individual financial situation is another important consideration to inform your policy selection. There are online calculators that can help you come up with an insurance estimate so you can have an idea of what you should expect to pay.
Throughout the divorce process, it will help you immensely if you’re able to become familiarized with the terminology and insurance categories. Whole life, term, and universal are some of the most common. You’ll only benefit if you learn about them all so you can find out which one applies to your particular situation since each policy option comes with its own pros and cons.
Term versus permanent life insurance
Term life insurance may come with the advantage of a lower up-front cost since they only cover a limited period of time, making it less of a commitment. Permanent life insurance may allow you to accumulate cash value, so you can make use of this policy later in life to pay for your own schooling or add to your retirement.
Whatever you do, make sure you proceed with caution. Know that changing your assets can potentially have an adverse impact on the outcome of your divorce.