Newly divorced talk show host Wendy Williams was “forced” to hold a $1 million life insurance policy for her ex in their divorce settlement according to recent headlines.
It may sound egregious, but insurance expert Erin Ardleigh, founder of Dynama Insurance can explain why this slice of a divorce story is not unique to celebrities. She recently spoke to TVGrapevine about what she does and what couples can do
1.Tell me a bit about what you do.
I founded my firm, Dynama Insurance (https://dynamainsurance.com/), to offer something different in the insurance marketplace – independent, unbiased and highly personalized advice. When someone needs insurance, I help them understand their options and find the best possible policy. We emphasize transparency and education – we want our clients to feel empowered to make good decisions, not pushed into buying the ‘product of the month’. When someone is getting divorced, we can be a good resource to save time, money and headaches if life insurance is required as part of their divorce agreement, or if they need additional insurance as a newly single parent.
2. Why do judges often suggest or require people, particularly celebrities to get life insurance?
Judges will usually require a person to get life insurance if that person has an obligation to pay alimony as part of their agreement. The life insurance would replace the alimony payments if the person passed away. Celebrities have larger incomes than the average person, so there is a greater likelihood that they will have to pay alimony, and therefore need to buy life insurance.
3. What are some of the biggest mistakes people make doing this and how can they be avoided
Whether you are a celebrity or not, I’m sure you don’t want to pay more than you need to for your insurance policy. It’s important to shop around because prices vary dramatically – one policy could be double the price of another.
4. What advice do you have for someone considering this?
It’s essential to work with an independent insurance broker. They will be able to help you compare quotes from multiple companies and find the best policy. Don’t work with an agent that only represents one company, because they have a financial incentive to sell their employer’s products. Resist the temptation to shop online. You will be overwhelmed with choices. The pricing is the same whether you go online or through a broker, but the broker will provide you with insight and service that you won’t get from a website.
5. Why is this important?
In addition to pricing, a broker can help you better understand how one insurer differs from another. For example, many divorce agreements allow the insured to reduce the amount of life insurance over time (as the required amount of total alimony drops) but not all insurance companies allow reductions.
6. How would someone go about doing this?
Your attorney or financial advisor can likely recommend an independent insurance broker. Ask the broker to show you quotes from at least three insurers. Also, make sure you and the broker understand the terms of your divorce agreement. Too many people rush because they want to ‘get it over with’ or because they get confused by the legal and financial jargon. It’s important to work with someone that will explain things to you (in plain English!) so that you feel comfortable with what you buy.