Going through a divorce can be an incredibly difficult time. Alongside the emotional impact, there are also many practical and financial matters to work through.

One area that can easily be overlooked is life insurance. However, your policy will not automatically change when you divorce, so it is important to review your cover as soon as you are able to.

Why you should review your life insurance after divorce

Divorce can significantly change your financial situation. Your household income, mortgage arrangements, dependants and future responsibilities may all look different, which means your existing life insurance may no longer be suitable.

Reviewing your policy can help you understand whether you still have the right level of cover in place and whether any changes need to be made.

If you have an individual policy

If you and your former partner had separate life insurance policies, you may still need to update your insurer about your change in circumstances.

It is also important to check who is named as a beneficiary. If your ex-spouse is still listed on your policy, they may remain entitled to receive a payout unless this is changed.

You may also want to consider whether the amount of cover still reflects your current needs. For example, you may now have different financial commitments, childcare responsibilities or mortgage arrangements.

If you have a joint policy

A joint life insurance policy does not automatically end when you divorce. It will usually remain in place until you make changes to it.

What you can do next will depend on your insurer and the terms of your policy. In some cases, it may be possible to split a joint policy into two individual policies.

If this is not possible, one person may be able to take over the existing policy while the other arranges new cover in their own name. Alternatively, you may decide to cancel the joint policy and each take out separate cover.

Before cancelling any policy, it is important to consider the potential implications. New cover may be more expensive, as premiums often increase with age. You may also need to provide updated medical information. If your policy is written in trust, you may need permission from all trustees before making changes.

What about your mortgage?

If your life insurance was arranged to help protect a joint mortgage, this should also be reviewed as part of the divorce process.

If one person is staying in the home and taking responsibility for the mortgage, they may need cover that reflects the outstanding mortgage balance and their new financial circumstances.

The aim is to make sure the policy still provides appropriate protection and that it supports the right person in the right way.

Speak to Pioneer

If you are going through a divorce or have recently separated, Pioneer can help you review your life insurance and understand your options.

We will explain everything clearly, help you check whether your current policy is still suitable and guide you through any changes that may be needed.

As with all insurance policies, conditions and exclusions will apply.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Source: https://www.legalandgeneral.com/insurance/life-insurance/family/life-insurance-after-divorce/