When you were married, you bought a life insurance policy. Maybe you were the main breadwinner for the family and wanted to make sure that your spouse was provided for if you passed away unexpectedly.
However, you have since gotten a divorce. You want to know if that life insurance policy is still going to pay out to your ex. If this is not what you would like to happen, you also want to know how to prevent it. So what is going to happen next?
Divorce doesn’t invalidate the policy
The first thing to know is that getting a divorce does not take your ex off of the policy or change who would receive the payout from the life insurance. All that the life insurance company cares about is who you named as a beneficiary. If you have not updated your policy after the divorce and your ex is still named as the beneficiary, they are still going to be paid when you pass away.
People sometimes think that the solution to this is to make changes in their will or another part of their estate plan. But this does not work, because that beneficiary designation takes precedence over the rest of your plan. So it really is important for you to update your policy when you get divorced, or you may find that your life insurance is still going to be paid to your ex. This can be very problematic if you would rather have that money go to your children or other heirs.
Creating the right estate plan
There are many different parts to creating an estate plan that works for your family. Just make sure that you know what steps to take so that your wishes are honored.