Are you contemplating or going through a divorce in New Jersey? Consider your rights regarding the life insurance policy you or your partner has. Here’s why it’s important.
Life insurance and divorce in New Jersey
There are two vital details about life insurance that you need to consider, i.e., are you the beneficiary of the policy, and what is the payout amount. You need to check to confirm if you are the beneficiary of your ex-spouse’s life insurance policy because if you are not, you won’t receive any money.
In New Jersey, if your ex had you as their beneficiary, they cannot change that 90 days preceding the official date of filing for divorce. Once the divorce process is commenced, the state put’s a freeze on changing beneficiaries until everything is settled.
Why do you need life insurance in a divorce?
Life insurance is a protective cover for children and spouses in case the holder untimely dies. During divorce or separation, the court can use it to replace child support and alimony. Thus, the judge will often order your ex-spouse to keep up paying the life insurance policy to back up alimony and child support obligations. In addition, if the insurance company permits, the court can order that the insurance policy name the other parent or the supporting spouse as one of the beneficiaries.
If the supporting spouse refuses to make payments, the court can issue financial sanctions on their assets until they comply. But, if they don’t have alimony obligations, the designation of your ex-spouse as the beneficiary can be revoked once the final divorce decree is reached.
How much life insurance do you need?
The amount of life insurance you need will depend on several factors, including age at death, gender, health status, and financial resources available to support children if necessary (or other beneficiaries such as parents). In addition, some insurers offer different levels of coverage such as “term” policies with fixed premiums for a specific number of years while others offer whole life insurance, which provides lifetime protection; however, it does come at higher monthly costs due to this added benefit.
In New Jersey, the court can force you to keep up paying life insurance or not, depending on how your divorce goes. If you have kids and have alimony obligations, you may need to maintain your insurance policy.