LIFE INSURANCE AND DIVORCE

After your matter is settled, more than likely you will feel a sense of relief. However, what happens if the spouse who is financially obligated for support passes away? To guarantee the completion of the financial obligation that are provided for in your Stipulation of Settlement, make sure that the responsible paying spouse has enough life insurance to meet these obligations.

In order to determine the correct amount of life insurance you need to determine as best as possible the total amount of support. Basic child support can be calculated by multiplying the monthly amount or yearly amount by the number of years for completion. Any pro rata add-ons to support can be estimated.  For instance, you may be able to estimate how much extra-curricular activities, college and other additional expenses will total during the lifetime of the child support obligation.  You should know exactly how much your maintenance obligation is and then multiply that number by the number of years payment is to be received.  Once you have the total, a life insurance policy should either be initiated or maintained to guarantee that the total amount of payments is insured through the entire period of support.  The policy should list the spouse receiving support as the beneficiary. 

As the years progress, the amount of insurance can decrease as the obligation decreases, which will also lower the premium payments. Typically, proof of said insurance policy is required within thirty (30) to (60) days after the execution of the Stipulation of Settlement.  By obtaining this policy, both parties are ensured that support payments, especially for the children, are maintained in the event of unforeseen circumstances.