Divorce rate rises – Protection warning

Divorce rate rises – Protection warning
Divorce rate - Protection
Do you need life assurance or income protection?

The insurance company, Aegon, has warned that arranging suitable protection insurance is often overlooked by people going through a divorce.

Aegon’s warning is as a result of new figures from The Office of National Statistics which showed that the divorce rate in England and Wales in 2012 rose to 118,140, an increase of 0.5% since 2011.

The divorce rate in 2012 was highest among men and women aged 40 to 44. The figures also showed that almost half (48%) of couples divorcing in 2012 had at least one child aged under 16.

Aegon has suggested that the key protection questions to be considered by people going through a divorce are:

  • Could you afford to support two families?
  • Could they afford to maintain the current standard of living for their children if they or their ex-partner were to become ill or die?
  • What if an accident or illness meant they could no longer work, or needed time to recover? Could they still pay the maintenance payments?
  • How would they meet monthly commitments such as mortgage payments, food and utility bills?
  • Do they have any joint financial policies that will need separating?
  • Are their current joint life policies flexible enough to be separated or altered to suit the new circumstances?

Many divorcing couples will naturally negotiate housing arrangements, maintenance payments and pensions, but often overlook financial protection for their children in the event of either parent’s sickness or death.

With the divorce rate on the rise, it is vital that anyone who is getting divorced or is maybe already divorced fully considers their protection needs.

The issues can become complicated after a divorce where there could be new families involved, which, in turn, could mean two families to be looked after and assets having to be shared out in the event of death. This is why it is imperative that people consider whether both parents, earning or non earning are insured against death or illness.

Clearly, if the parent who stays at home to look after the children could no longer do so due to death or illness, this would have financial implications for the working former spouse.

Post courtesy of Cover Magazine.