March 15, 2021
While general divorce rates have been declining to a record low in 2019, divorce rates have tripled for those age 65 and older over the past 25 years.
Known as “gray divorces,” this group can be especially hard hit when marital assets are divided.
According to a 2015 study by the American Sociological Association, women initiate two-thirds of divorces. College educated women clock in even higher at 90%.
Divorce at any age brings about financial challenges, but it becomes particularly difficult at later ages when there is little time to make up for the loss of shared retirement assets.
While women may initiate the majority of divorces, they also suffer disproportionately both financially and emotionally. When working with clients who are divorcing it is important to assist them with creating an inventory of their assets including any life insurance policies. Providing an appraisal on the value of the policies is an important exercise since the cash values in permanent life insurance policies are considered a marital asset.
A divorce agreement may permit the payor to step down insurance over time as support is paid. In other situations, the policy may no longer be needed and getting an appraisal can lead to substantial additional value in the secondary market known as a life settlement.
Life settlements pay policyowners an average of four or more times the policy’s cash surrender value. These proceeds can be used as part of a divorce settlement.
As a trusted advisor to your divorcing clients, be aware of the importance of obtaining an appraisal of this often-overlooked asset. Appraisals are fast and free from life settlement providers like Lighthouse Life.
For more information, speak with your Lighthouse Life representative. If you don’t currently do work with Lighthouse Life but would like to learn more, you can contact us here.