It seems there are as many types of insurance as there are insurance companies or agents. The industry has created a variety of products designed to fill a variety of purposes, including coverage for debts, illness, injury or disability as well as life insurance.
There are two basic types of life insurance – term and permanent. Term life insurance is generally the most common type of insurance as it is often the least expensive. Permanent insurance, also known as whole or universal life, is more expensive than term but may offer a savings investment or dividend payout option which also increases the value of the policy.
In the event you have a whole or universal policy, the cash surrender value of your policy at both the dates of marriage and separation are included in a net family property calculation. A cash surrender value is the amount the insurance company would pay if the insurance policy is cancelled.
For the purpose of completing your Financial Statement, it is important to include all of your insurance, whether it is coverage provided by your employer, financial institution or an individual policy you purchased yourself.
In order to save time and expense and as soon as you can, ask your insurance company or agent to provide you with a statement for each policy which includes the following information:
- the company who has issued to policy, the type of insurance and policy number;
- the owner of the policy and the name of the person whose life the policy covers, also called the “insured”,
- the dollar amount that will be paid on the death of the insured, also called the “face amount”;
- the amount of the premium, which is also helpful when completing Part 2: Expenses;
- the named beneficiary and confirmation if this designation is “irrevocable” (cannot be changed without the beneficiary’s knowledge and/or consent), and
- the cash surrender value and accumulated dividends at the dates of marriage, separation and when the statement has been prepared.
You may also want to provide a copy of your policy in the event you are asked to produce it in the future. If you have coverage through your work, it would be wise to obtain a similar statement from your provider and supply a copy of your benefits booklet.
In addition to forming part of your full financial disclosure, this information is also important when a spouse is claiming security for future child and/or spousal support. This issue will be dealt with in more detail in a future posting.
Please be sure you speak with your lawyer before you make any decisions about insurance, including changing your beneficiary, borrowing against any cash value or cancelling your coverage.