You may expect to have to pay for alimony and child support after a divorce, as well as splitting up community policy with your ex-spouse. But did you know that you might be required to buy life insurance as part of the divorce? And you may have to keep your ex-spouse as beneficiary on your current life insurance policy? Here is some information you need to know about the situation:
Life insurance after divorce may be needed as part of the settlement
It turns out that you may find that after a divorce, that you may need to have to pay for life insurance coverage that would benefit somebody that you are no longer married to. That is what happened to New York Yankees general manager Brian Cashman. He recently went through a very bitter divorce – his wife Mary filed for divorce after it was discovered that he was cheating on her. And not only does he have to pay literally millions in alimony and child support — $1 million a year until 2025 – as well as educational expenses and life insurance for his kids, he also has to give his ex-wife the $3.7 million family home in the settlement. In addition, Cashman also has to pay for life insurance.
He already had a life insurance policy on himself to the tune of $2.25 million, with his wife as the beneficiary. Now, according to the terms of the divorce settlement, he must buy an additional $2.75 million life insurance policy with his wife Mary as the sole beneficiary. That is a total of $5 million in life insurance on Cashman. And, as people have pointed out that the Yankees GM has some rather reckless habits – he recently broke his ankle skydiving, and he also likes to rappel down buildings – a cynic would say that it makes sense that there is so much life insurance on him. Cashman makes $3 million a year as Yankee GM, so if he were to pass away, his ex-wife and children would be losing that $1 million in alimony and child support.
In addition, George Zimmerman, the Florida man recently acquitted for shooting Trayvon Martin, is reportedly about to go through a divorce, and his estranged wife, Shellie, requested that he take out a permanent life insurance on himself, with her named as the beneficiary. According to ABC News, she said that he should pay for the life insurance policy because he “has the financial ability to obtain such life insurance at reasonable rates.” So getting an ex-spouse to buy a life insurance policy is not a unique issue.
What should you do in the case of divorce and finding good life insurance rates?
If you have to pay your ex-spouse alimony or child support, you may have to have a life insurance policy on yourself, with your ex-spouse as the beneficiary. The reason is that if you were to pass away, your ex would be otherwise out of the money in alimony and child support. So it is important to find life insurance rates that will work for you.
At any rate, you may also need to get life insurance on yourself with the beneficiary of your own choosing, according to BestLifeInsuranceDeals.com. Such a life insurance policy could pay for your funeral and burial expenses, as well as potentially go to a second family. So you may need to buy multiple life insurance policies, and look for the best life insurance rates.