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Life Insurance in Divorce

HomeLife Insurance in Divorce

Chicago Divorce Lawyers Protecting Life Insurance in Divorce

There are two main and different considerations in regard to life insurance and divorce proceedings.  First, if the parties have minor children and/or a party is obligated to pay child support, maintenance (also known as alimony) or property payments then the court may order or the marital settlement agreement will likely include language that requires a party to obtain or maintain life insurance for the duration of the financial obligation to the other party.  While this may seem like an unfair obligation, the courts have determined that the burden placed on the party who has a duty to make the payment far outweighs the possibility of the other party or family members to seek state or federal government aid after the death of a party that still has an existing obligation.

Second, if a party has no financial obligations to the other party after a divorce, then each party must also keep in mind that obtaining a divorce in Illinois does not automatically remove the former spouse as a beneficiary to a policy and each life insurance policy should be awarded to one party.  It is important to ensure that settlement terms are clear as to which party is being awarded which life insurance policy, as changes (such as beneficiary) will have to be made after the case is finalized.  Oftentimes, there are also cash values or monthly payments that must be made to ensure continuing coverage or payout, so clear guidance from a family law attorney on the life insurance policy aspect of a divorce is important since the long-term future ramifications can be significant. Contact the knowledgeable attorneys at WARD FAMILY LAW, LLC, to learn more about life insurance in divorce.

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