At the beginning of each divorce case, the parties always have questions regarding how the divorce will impact their daily lives, especially their finances. One of the biggest issues, and often most disputed, is support. The parties cannot plan for their separate futures until they know whether a support order will be made and the level of support which will be ordered. Once the parties have a support order or agreement they will next consider what that support amount is intended to cover? Will my spouse have to continue paying my health insurance? Will my spouse pay for our children's health insurance? Will my spouse pay for uncovered medical and dental expenses? Will my spouse pay for extracurricular activities? Will my spouse pay for childcare? Typically these are the main concerns for divorcing parties when discussing support issues. However, it is not uncommon for family law litigants and their attorneys to forget one important issue - support in the event of the death of the paying spouse.
Life insurance can be an uncomfortable topic of discussion; however, the issue of life insurance is an extremely important subject to include in divorce settlement negotiations. In the event that the parties cannot reach a full agreement regarding all issues, they can ask the court for orders. The court has jurisdiction to address the issue of life insurance and to make appropriate orders for the parties. In cases where child and/or spousal support amounts are relatively high, it is reasonable to consider insuring the paying spouse as a form of security for support. In high conflict cases the supporting spouse may be hesitant to agree that his or her former spouse will be the beneficiary of an insurance policy on the supporting spouse's life. The supporting spouse often says "I don't want to give my former spouse more incentive to kill me". This type of argument will not likely be given much weight by a family court judge.
Through agreement or court order, once the parties determine that the supporting spouse's life should be insured as security for support, the attorneys and clients should discuss the amount of policy and which party should be responsible for the premiums. In cases where the parties take out life insurance as security for child support, the supporting spouse may be ordered to pay the life insurance premiums in the form of additional child support. If available, the parties often agree that the supporting spouse shall maintain a currently existing life insurance policy. The total amount of insurance should be based on the monthly support obligation and the number of years support will likely be paid. Each case is unique; therefore, it is important to discuss the issue of life insurance as security for support with an experienced family law attorney.