Permanent life insurance policies like universal and whole life ones increase in cash value the longer you have them. When you pay your monthly premiums, a portion of that money will be placed in a fund that will become that policy’s cash value. This value will also increase with interest over time. If you want to, you could choose to cash out your life insurance policy at any time. This would mean that you could get the cash value of your policy, but you would no longer have the death benefit.
Because the cash value of your life insurance is considered to be a portion your net worth, the life insurance policy and its cash value would need to be taken into account if you are getting a divorce. Essentially your life insurance policy becomes a martial possession that needs to be divided equally in the divorce process. You will most likely get half of the cash value of the policy with the divorce.
Life Insurance is often among the last thing on the minds of divorcing couples. Whether a contested divorce, a collaborative divorce, or somewhere along the path in between, quality advice from an experienced family law attorney is incredibly important to protect your interests during divorce.
