Life Insurance and Divorce in Georgia

FAQs from a Gwinnett County, Georgia Divorce Lawyer serving all of metro Atlanta

Life insurance is a financial protection tool, one that will provide your heirs with the financial resources they need should something happen to you. Life insurance and divorce in Georgia can be confusing. If you were the beneficiary, you may no longer be, and, in some cases, it may be necessary to update your own life insurance documents.

To help you navigate this process, turn to Attorney Sharon Jackson LLC. Let us provide you with insight into life insurance and child support in Georgia. The following are some of the most frequently asked questions we receive about ife insurance and divorce in Gwinnett County, Georgia.

FAQs About Life Insurance and Divorce in Georgia

Is Life Insurance Considered a Marital Asset in Georgia?

Under Georgia law, any type of life insurance policy obtained during the marriage is considered marital property. That means it is subject to equitable division like any other asset in your case. If the life insurance policy has a cash value to it, which many whole life policies have, then it is a marital asset that must be divided according to the law. So, is life insurance a marital asset in Georgia? It can be, depending on a variety of factors.

Can My Spouse Be Ordered to Maintain Life Insurance After Divorce?

In some situations, it can be hard to obtain life insurance after your divorce, especially if you are older. You may want the court to require that the spouse that is currently providing life insurance policies for you to maintain them even after your divorce.

A judge can make this decision, and they are likely to do so if your divorce decree includes child support or alimony. In these situations, maintaining life insurance could be critical to preserving your financial well-being when your ex-spouse is providing for your financial needs.

If one spouse did not work during the marriage or worked at a smaller company, the judge could order that the spouse who previously provided the insurance continue to pay for the life insurance policy for the dependent spouse for a specific amount of time. When this occurs, it is usually for a shorter period of time to allow the dependent party time to obtain a new policy, unless the person has reasons why they are not insurable.  If the dependent person is uninsurable  due to a major illness like stage 4 cancer, then the court may order lifetime continued payment by the original paying spouse.  However, the court can order the dependent to reimburse the paying spouse for the costs of the coverage.

Can a Divorce Settlement Require a New Life Insurance Policy?

The parties can agree or the judge can order the payment for a new life insurance policy.  If the divorcing party has an outstanding alimony or child support obligation, judges frequently require that the payer maintain a life insurance policy on the payer’s life to ensure that if the payer dies, the dependent former spouse or child will not be left without support.  The life insurance policy is usually ordered to be maintained so long as alimony or child support is still owed.

Who Gets the Life Insurance Payout in a Divorce?

Life insurance provides a payout at the time of the covered policyholder's death. This payment is made to the person named as the beneficiary on the policy. No matter what, it is going to that person.  However, if your divorce decree or settlement agreement required that insurance be maintained and this was not done, the rightful beneficiary might be able to sue the estate.

If you have a life insurance policy in place that lists your ex-spouse, you should change the beneficiary right away. Doing so is a core component of the steps you need to take post-divorce to protect your financial future. If you fail to update this information, and your spouse remains named on the policy at the time of your death, they receive these funds.

How Does Life Insurance Affect Child Support and Alimony?

Having life insurance does not change the requirements to pay child support and alimony according to the requirements set by the law. However, having a life insurance policy in place can help to protect the spouse or children should the parent paying those funds die unexpectedly.

In other words, by having life insurance in place for the party that is providing financial support to you or your children, you gain a bit of peace of mind. If that parent passes away, the death benefit can help to cover those costs in the future. Note that even if you are younger and your spouse is healthy, having this type of financial tool in place to protect your financial future and that of your children could be essential when the unexpected occurs.

What Happens If My Ex-Spouse Stops Paying for Court-Ordered Policy?

Divorce and life insurance policies go hand-in-hand today. Just like any type of court order, if the ex-spouse stops paying on the life insurance policy, they can be held in contempt. This can become challenging since nonpayment can lead to immediate cancellation of a life insurance policy.

If you suspect that your spouse will stop making payments or has done so, it is critical to seek legal support right away. Your attorney will work to determine what legal steps may be necessary to keep the policy active or to recover another policy should it lapse.

What is the Difference Between Term and Whole Life Insurance?

Divorcing parties often confuse term and whole life insurance. When asked to complete a domestic financial affidavit or DRFA one common question is what is the value of any life insurance policy that you own.  Term life is insurance for a specific length of time or term such as 10, 20, or 30 years.  This is only payable if you die and it has no cash value to you. Because you have to be dead to collect it and die during the period in which you were covered by the insurance, you can’t benefit from it because you will be dead.  Only your beneficiaries will benefit for it.  In contrast, whole life has a cash value and you don’t need to die to collect it.  You may be able to pull money out of the policy while you are still alive. All types of life insurance policies can be divided by a judge or the parties during a Georiga divorce.

How Can I Protect My Life Insurance Benefits in a Divorce?

Life insurance and child support in Georgia are financial tools that allow you to build a strong financial future. Taking steps to protect them is critical. Consider the following:

• Review all life insurance policies before and after the divorce.
• Update your policy to reflect the party you wish to receive the death payment on any policy that you have in place for yourself.
• Work with your attorney to ensure that fair division of assets occurs even if there is a cash value component to your life insurance policy.

Should I Consult a Lawyer About Life Insurance and Divorce?

Both life insurance and divorce in Georgia are critical factors that could play a role in your financial future. You certainly want to work with a knowledgeable Gwinnett County divorce attorney who will tell you what your rights are based on the individual circumstances of your case. This may include petitioning the court to require the maintenance of such policies as well as the requirement to put a life insurance policy in place.

Seek out the legal guidance you need today from Attorney Sharon Jackson, LLC. We can answer any questions you have about your rights to fair compensation and division of assets. Contact us now by calling (678) 436-3636.