ENSURING SUPPORT PAYMENTS THROUGH A LIFE INSURANCE POLICY

Settling the terms of your divorce is a milestone that should not be taken lightly. However, there is more to consider than just the amount of monthly support payments and the length of the term of support. You need to protect the terms of your settlement in case the spouse who is financially responsible for support passes away. To do this the spouse who is obligated to provide support should obtain a life insurance policy for an amount required to cover the entire financial obligation.

Once you have agreed on a support number and duration, you can then determine the total amount of support that you will be either obligated to pay or entitled to receive as a result of your Agreement. Basic child support can be calculated, and any pro rata add ons, such as unreimbursed medical and dental can be estimated.  You should also estimate the cost of extracurricular activities, college and other additional expenses. You can also determine the total amount of maintenance by adding the monthly support multiplied by the years of payments.   Once you have this number, a life insurance policy needs to be obtained to guarantee all support payments until support terminates. The policy should list the person entitled to support as the beneficiary. 

As the years progress, the premiums can decrease as the support obligation will decrease. By obtaining this policy, support payments, especially for the children, are protected in the event of unforeseen death of the party responsible for the payments.