Negotiating a life insurance policy into your divorce settlement
There are countless stories about deadbeat spouses who don’t pay alimony or child support. But even those who gladly follow through with their post-divorce financial obligations can unintentionally cause hardship for their ex-spouses and children if they die.
As you look for an attorney to handle your divorce—and think about what you want and need in the settlement—you might want to consider a provision in the final divorce decree that requires your soon-to-be ex to buy a life insurance policy, with you as the beneficiary.
It sounds a little like the plot of a Lifetime movie, however, asking your ex-spouse to take out a new life insurance policy is a way you can protect yourself financially in the unlikely event that he/she becomes ill and dies or is killed in an auto crash. Keep in mind, an insurance policy is exactly what it sounds like—insurance that you will receive the money you are entitled if the unthinkable happens. You and your ex-spouse should agree to an insurance policy as part of your divorce settlement, just as you agree to division of property, child support, alimony and custody.
If your ex-spouse agrees without a fight, he/she will buy a new policy and will be required to keep up by paying a monthly premium. You and your attorney, however, should discuss how big of a death benefit you should negotiate. That could depend on what you estimate your future expenses will be, how many children you have and their ages at the time of the divorce, and if the kids’ college tuition is a factor. The average term life insurance payout is $250,000. Another option is a whole life insurance policy, which might mean a higher premium but it is partially invested in set assets and will build cash value.
Your divorce is a chance for a fresh start. Financial worries don’t have to make things difficult. You and your ex planned for the what-ifs when you were married. It’s a smart idea to continue those efforts even though you are no longer husband and wife.
The experienced family law attorneys at the DiPietro Family Law Group have decades of experience handling all types of family law matters and are here to help you. Contact us today.