If your ex-spouse is the higher earner, who is paying maintenance and/or child support, and you are dependent upon this income; a life insurance policy will secure these important divorce settlement payments. The preferred method is to establish the life insurance policy before the divorce has been finalized, with you as both the owner of the policy and the beneficiary, to ensure that the premiums will be paid on time and the beneficiary won’t be changed without your knowledge and consent.
The main reason(s) it is prudent to obtain a life insurance policy before the divorce is final is: your ex-spouse may refuse to cooperate in getting the required medical exam; and/or, if he is uninsurable (for health or other reasons), you can find alternate ways of securing your divorce settlement payments. However, if your divorce is final, you have only to prove financial interest (which should be no problem) and your ex has to agree to go through the application process.
Life insurance is a good instrument to secure your divorce benefits, especially alimony, that will end upon the death of your ex-spouse. The proceeds from a life insurance policy will give you a tax free, lump-sum payment of what you would have received over time from your divorce settlement.
In addition to obtaining a life insurance policy securing your settlement, many couples revise existing life insurance policies naming their children as beneficiaries. If your children are minors, an adult custodian may be appointed to handle the proceeds on their behalf or a special trust may be established. Either way, their future educational needs are provided for should something happen to the parents.
If you are facing a family law issue such as divorce, child custody, or child support, you may want to contact the Stange Law Firm, PC. Questions like this one can be handled with the help of one of our accomplished attorneys. It is worth it to get professional representation to protect your children and your assets.
Stange Law Firm, PC offers a confidential half-hour consultation to sit down with one of our attorneys. Call 855-805-0595 or visit us online to schedule an appointment.
Source: “Three of the most frequently asked questions about health insurance, life insurance and social security after divorce” By Jeff Landers, Forbes