Divorce, judicial separation, and the dissolution of a civil partnership is an emotional and difficult time for any couple and their loved ones.
Unfortunately, along with making financial arrangements around assets, property, and possessions, as part of the process you will also have to consider your life insurance provision. Life insurance provides peace of mind and essential financial protection, possibly even more so after divorce.
There is no easy solution in this scenario and the court will ultimately take many factors into account in deciding the financial arrangements that are part and parcel of a marriage or partnership breakup.
How does divorce affect life insurance?
Life insurance may be considered an asset by the court, and assets will be divided by the court during a judicial separation, divorce, or dissolution of a civil partnership.
Many factors relating to the family circumstances, spouses, and the welfare of any children in the family will be taken into account in dividing joint assets and the court will aim to reach an equitable division of assets. This may not mean that assets are divided 50:50 and the division of assets is very complex.
Financial compensation order
As part of a divorce, the court may also put a Financial Compensation Order in place . This means that a former spouse who pays maintenance must have life insurance in place naming the other spouse or a child as the beneficiary in the event that they should die, as maintenance payments would cease.
How does divorce affect Joint life insurance
If it is the case that as a couple you have two single life insurance policies, then these policies may continue to provide you and your former spouse with life insurance cover, although you may need to review your sums assured or cover amounts to ensure that they provide adequate cover for your new circumstances.
It may be the case that your joint life insurance will remain in place unless this matter is specifically addressed by the court.
If you have joint or dual life insurance, however, you may need to consider who will benefit from the life insurance when you die. You may need to change your life insurance beneficiary if you do not wish your former spouse to receive the benefit should you die.
You may also find that you need to arrange your own new life insurance policy. This may entail canceling your existing joint policy and purchasing a new policy, or your insurer may allow you to separate the two policies. One partner may be able to continue the existing policy, while the other partner has to purchase a new policy in their own name.
How does divorce affect Mortgage protection
Your joint life insurance may be in place to protect your mortgage or you may have a joint mortgage protection policy.
It may be the case that the former spouse or partner who remains in the home takes over the existing policy while the other spouse or partner has to get a new life insurance policy.
If the former marital home is to be sold, then you may decide to cancel the mortgage protection policy if you no longer need this cover.
Purchasing life insurance later in life
If you are faced with purchasing a new life insurance policy following a divorce or later in life it can be more expensive than purchasing in your 20’ and 30’s.
You may also have some health issues that have developed over time so it is possible that you will have to answer health questions, provide a report from your GP, or undergo a medical in order to obtain new life insurance cover.
However, depending on the amount of cover, or ‘sum assured’ that you require, it is possible to get affordable life insurance cover up to your 60’s, 70’s and even your 80’s.
The best advice is to work with a qualified financial advisor, especially if you have developed health issues, as they will have access to multiple quotes and have a good insight into the Irish insurance market which can help your application for life insurance.
Contact us today
Fill in our online assessment or speak to a specialist insurance advisor in order to discuss your life insurance needs and receive tailored quotes from multiple life insurers.
We can discuss your circumstances and insurance needs with you and advise you as to how to get affordable life insurance options that meet your requirements and provide the right cover for you for total peace of mind.
