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How Do You Divide Life Insurance In A Divorce?

You and your spouse have worked hard over the years “building your empire” so to speak, among those assets that you have acquired as a married couple is life insurance for one or both of you. Regardless of who the actual insured spouse is, you have both put community property (money acquired during the marriage through earnings) towards the monthly premiums. Now, a divorce is looming and you may be wondering what happens to the life insurance and all the hard earned money that was paid monthly for the premiums.

Generally the spouse that is insured will keep the policy and remain insured. As far as getting any money back that you have paid towards the premiums during the marriage, that depends on what type of life insurance policy your spouse has. If the policy has a cash surrender value (usually whole life policies do) then the insured spouse will still keep the policy, however he/she will likely to have pay you half of that cash surrender value.

If the policy has no cash surrender value (usually term policies) then case law is split and it will be up to good lawyering to convince the court that you still deserve a payout, even without a cash surrender value. The way this can be done, and has been successfully done in the past, is to convince the court to use the replacement value of the policy as the cash surrender value. Whichever type of policy the life insurance is, it should not be overlooked when dividing assets as both parties have contributed equally (even if only one spouse is the household earner).

If you find yourself in the midst of a divorce or with a divorce looming the best thing you can do is consult a competent and compassionate attorney who knows the law and is a skilled advocate who will fight for your best interest

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