Will a life insurance payout go to my estranged spouse?
[social_share]One of the big problems with paying in life insurance is that the person who is paying in life insurance is not sure that the life insurance will be going to someone who does not need the money. It is a good idea to know where the money goes and to know how to change the beneficiary so that there is some peace of mind.
Life insurance is usually needed if there are any dependents. However it can often be the case that those dependents change. This is often the case with a spouse. It may be the case that the spouse is either looking after children and so at a low point in their career, or will need help with looking after the children if the insured person dies. After a while the children may grow up and the marriage may grow apart. In these cases some people see that there is less need for paying life insurance. This is rarely the case as there are still dependents; it is just that they are different people.
Abandoning a life insurance policy is not usually a good idea. Abandoning a life insurance policy voids the policy and means that the money that has been paid will have no benefit if the person dies within that time. It is almost always better to keep the policy paid up in order to keep the benefits. There is also the fact that there are usually other dependents, such as children or another spouse. Losing one dependent is not a reason to lose life insurance if there are other dependents.
It is often necessary to change the beneficiary on a life insurance policy so that the right person is getting the life insurance payout. The rule on this should be that if a person no longer needs the life insurance then they should be replaced by a person who does need the life insurance.
If there is alimony being paid then a divorce settlement will often insist that the life insurance is kept up to date. In many cases it may be that the premiums are paid out of an extended alimony.
In some cases it is a good idea to name the children as the beneficiary. This means that if the children are under 18 this will create a trust for the children.
