Who Will Get Your Life Insurance Proceeds After Divorce? The easiest way to modify life insurance beneficiaries after divorce to add someone else to the policy is to contact your current insurance company to see if your existing policy was sold through. In general, no matter who s life insurance beneficiaries are, life insurance proceeds are typically only paid out to the name of the named beneficiary on an existing policy. If you have some other loved ones that aren't listed as beneficiaries on your life insurance policy, you will have to make some changes to the policy. To do this, you will have to file a life insurance beneficiaries statement with your current insurance company.

What are some of the things that you can do when you need to modify life insurance proceeds after divorce? The most common thing that people do is add their former spouse to their life insurance policy. Although this is a popular choice because it makes good financial sense, there are some drawbacks to this option. In most cases, adding someone as a beneficiary to a life insurance policy after a divorce is a mistake.

First, you need to be very careful about who your beneficiaries are under your existing life insurance policy. If your ex-spouse has access to all of your property and money, then adding them to your life insurance coverage could be a very bad idea. If you think that you can get away with leaving your ex-spouse out of your life insurance proceeds because you have no other dependents, you are mistaken. Your ex-spouse could be well aware of your divorce decree and may use this information to take advantage of you. On the other hand, there are situations where life insurance proceeds can be easily accessed by ex-spouses. In these cases, adding them as beneficiaries to your existing policy would actually be detrimental to your interests.

Second, life insurance proceeds can become immediately available if you have an emergency need for cash. Cheapcarinsurance4you is another scenario in which ex-spouses may have a difficult time keeping track of their finances. They might not know what's coming in, coming out, or going to. In such a situation, they might access your life insurance and claim you for debt settlement. If you don't have a life insurance policy, your ex-spouse can simply take whatever funds you do have over to their new life insurance carrier in an attempt to have you killed so they can get the rest of your inheritance.

Third, your ex-spouse could also change the terms of your existing life insurance policy to take advantage of your divorce decree. For example, they may add a stipulation that you are required to remarry within a certain period of time after your divorce. Or perhaps your ex-spouse decides to stop your death benefit or increase your lifetime benefit.

Fourth, life insurance proceeds can be held in trust until a specified amount of time has elapsed. If the time allotted is up, the money is then distributed. Some states have a five-year limitation. Some states allow you to specify a deadline for distributing the proceeds if a beneficiary is not available to receive them. If you have a co-guarantor or other form of protection from the decree, the proceeds can be dispersed immediately.

Fifth, your ex-spouse might name a beneficiary but then change his or her mind at some point and decide not to name a beneficiary. Again, this is usually a five-year deadline or a stipulation in the divorce decree. You can then select another beneficiary or have the proceeds divided by a court order. Again, if you have co-guarantor protection in the decree, you may also have the right to name a beneficiary who will receive the entire proceeds if the deceased insured is not a co-guarantor. Many people have trouble doing this because they believe their ex-spouse will change his or her mind once they've been awarded the settlement. In many cases, this isn't the case, but it's always better to be safe than sorry.

Sixth, your life insurance proceeds can be dispersed by one or more of your ex-spouse's if one of them was named as a beneficiary. If your ex-spouse was named as the beneficiary, you generally have no further legal duties to your beneficiary other than paying the premiums on the policy and making sure the policy is in good standing. If the carrier becomes insolvent, you may be able to sell the policy and obtain the proceeds directly from the insurance carrier. However, you should consider carefully whether this would make you personally liable for the policy since you would become the "insurance carrier" and must retain control of the policy, which means you would be personally liable for the premiums. You can discuss these possibilities with an experienced life insurance broker. If you decide to sell the policy, you should carefully review the policy to determine its viability in the event of your divorce.