One of the most difficult things to think about when going through a divorce is mortality. Unfortunately, planning ahead and being prepared, in the unlikely occurrence of a sudden death of one or both of you, is one of the most important things you and your soon-to-be ex can and must discuss.
Stipulation of a Divorce
Last week my sister got a call from her ex-husband. He wanted to know how much life insurance he was supposed to have based upon the stipulation of their divorce. Right away, I was scared. Then she told me he was experiencing stomach problems, and the doctors' thought he might have cancer. He was distraught over the fear of his own death, and even more afraid of leaving his children behind, and not being able to provide for them.
Red flags went up for me, but I haven't had the heart to ask my sister if he even has a policy or whether he let it lapse. They parted on angry terms and have not been able to reconcile very well since.
Today my sister sent me an email. Her ex went into the hospital over the weekend. His kidneys have shut down and the blood tests indicate Stage IV stomach cancer. The doctor fears that he will not survive an operation. The prognosis isn't good at all. I'm thinking he is uninsurable at the moment.
Financial InsecurityMeanwhile, my sister has a $100K mortgage and a big house she has been trying to maintain since the divorce. She has a good job, but has been grateful for the weekly child support she has received from him. It has probably meant the difference between eating and not.
With children ages 9 and 12, she still has the most expensive part of child-rearing ahead of her, and now it looks like she may be the sole supporter in the not too distant future.
What should you do when you are getting a divorce and want to secure the financial stability of your children?
What to do to ensure long-term income in case of a sudden death of an exDivorces can stipulate that each spouse take out a life insurance policy, but sometimes due to attitude problems or financial circumstances, the insured will allow the policy to lapse.
If possible, consider having a grandparent or the other spouse hold the policy so that in the case of a failure to make payment, they can pay the policy and keep it up.
Term insurance for young adults is not that expensive and there are different options and price points based upon the health, lifestyle and age of the person being insured. For most people, it will run below $300 a year for a $250,000 policy. Women and men's rates are pretty comparable, but smokers' rates will run higher as will those for heavier people.
If your spouse is responsible and agrees to hold a policy on himself, make sure you are the beneficiary. Children under 18 are not permitted to be beneficiaries. If a husband remarries, he may elect to change his beneficiary to his new wife, particularly if it is company funded.
If he decides to do this, however, you may have to take them back to court if they refuse to get another policy that meets the terms of the divorce.
You just never know what the future will hold. Single mothers rarely have money for one more bill on their plate, but of all the expenses they incur, this one might be the difference between calamity and getting by.
Kay Balbi is a licensed insurance and annuities sales provider, FL
Divorce and life insurance: http://www.womansdivorce.com/divorce-and-life-insurance.html#DROPPED
Stomach cancer: http://www.medicinenet.com/stomach_cancer/page11.htm