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Divorce & Family Law This forum is for discussing any of the legal issues involved in your divorce.

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Old 12-08-2011, 10:37 PM
NoRegret NoRegret is offline
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Default question about life insurance

In the equalization payment calculation, why is my life insurance considered my asset? I won't be alive when the money is available. my stbx is the beneficiary, shouldn't it be my stbx' s asset then?

Also I read somewhere that if I cancel it, my stbx can take over and pay the premium, so that he will still benefit from my death. I have no problem with this, after all if I die I don't need the money.

Any thoughts? experience with this?
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Old 12-08-2011, 11:53 PM
FaithandMorals FaithandMorals is offline
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Life insurance has a cash value. If the policy is paid in full it can be redeemed like cash. Also, if it is a benefit from your employer many countries consider this a taxable benefit.

Basically, it may help to think of an insurance policy as an IOU. Therefore, it is an asset. It's an accounting thing.

You may want to consider making your child (if you have any) as the beneficiary.
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Old 12-09-2011, 12:36 AM
NoRegret NoRegret is offline
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Quote:
Originally Posted by FaithandMorals View Post
Life insurance has a cash value. If the policy is paid in full it can be redeemed like cash. Also, if it is a benefit from your employer many countries consider this a taxable benefit.

Basically, it may help to think of an insurance policy as an IOU. Therefore, it is an asset. It's an accounting thing.

You may want to consider making your child (if you have any) as the beneficiary.
We don't have kids. I don't have family here. so I think it's not necessary to keep it. but the premium is very low, if I cancel and then within 5 yrs let's say I have kids, I won't be able to get the same policy with low premium. I am 34 now. if I keep it, it looks like my asset is a lot bigger than his in the separation agreement, where as I can't even collect the money as I will be dead by then.
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Old 12-09-2011, 07:29 AM
standing on the sidelines standing on the sidelines is offline
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i didnt use the value of the pay out of the policy if i died, there is a cash surrender value. If i cashed in the policy today I would get my cash surrender value which is something like 6 grand vs the 120,000 that it is worth if i were to die instead. I put the 6000 on my financial statement and my lawyer never said that i had to use the pay out amount, the 120,000.
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Old 12-09-2011, 08:35 AM
Mess Mess is offline
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Whole Life is like a savings account. The cash surrender is roughly what you have paid in premiums. You can cash that in at any time. It is an asset.

Let's say you have 10k in cash in the bank. You die. You didn't get to spend it. You are arguing that it shouldn't be an asset. It is.

Like standingonthesidelines says, you don't list the payout as your asset, just the cash surrender.
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Old 12-09-2011, 02:50 PM
NoRegret NoRegret is offline
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Quote:
Originally Posted by standing on the sidelines View Post
i didnt use the value of the pay out of the policy if i died, there is a cash surrender value. If i cashed in the policy today I would get my cash surrender value which is something like 6 grand vs the 120,000 that it is worth if i were to die instead. I put the 6000 on my financial statement and my lawyer never said that i had to use the pay out amount, the 120,000.
Thanks for this, that sounds fair to me. How to find out the cash surrender value? Do I have to get it appraised, or just ask the insurance company?
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Old 12-09-2011, 02:53 PM
NoRegret NoRegret is offline
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Quote:
Originally Posted by Mess View Post
Whole Life is like a savings account. The cash surrender is roughly what you have paid in premiums. You can cash that in at any time. It is an asset.

Let's say you have 10k in cash in the bank. You die. You didn't get to spend it. You are arguing that it shouldn't be an asset. It is.

Like standingonthesidelines says, you don't list the payout as your asset, just the cash surrender.
thanks for the info about cash surrender value. I will include that amount instead. I've only been paying for 2 yrs.
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Old 12-09-2011, 07:36 PM
standing on the sidelines standing on the sidelines is offline
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Quote:
Originally Posted by NoRegret View Post
Thanks for this, that sounds fair to me. How to find out the cash surrender value? Do I have to get it appraised, or just ask the insurance company?
just ask you insurance agent to forward you the information.
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