Divorce & Joint Asset Care

A Pew Research Study of divorce discovered an alarming statistic, divorce rates for couples aged 50+ have increased over 100% from 1990 to 2017.

This presents a challenge for survivorship / joint insurance policies.  On a traditional life insurance side, some carrier have addressed this situation by providing a “policy split option” where each spouse receiving equal death benefits and cash value with new individual policies being issued.

With Asset-Care joint policies, this is not the case.  We do have a strategy that will allow both insureds (former spouses) to maintain their LTC insurance protection.

It’s important that the divorcing couple remember that the purpose for their LTC protection was likely to not be a burden on their family.  That has not changed – it simply moves their children closer to the front line of a potential extended healthcare event.

With Asset-Care, one solution is to surrender the policy and split the cash value between the former spouses to purchase a new policy at their current age.  However, that entails the the potential for higher premiums, not being able to qualify due to changes in their health, and not being able to obtain the same level of benefits.

While we cannot split the policy in half, placing the joint policy ownership in the hands of a third party like a trustee.  The trustee would maintain the policy in-force and ensure that each spouse receives benefits from the policy.  Additionally, each former spouse could name separate beneficiaries.

Our compliance approved one-pager outlines this concept.

The OneAmerica Advanced Sales team can provide sample trust language and guidance.

Our Advanced Sales team can be contacted at advancedsalesilfs@oneamerica.com