Divorcing mates may focus so intently on the division of assets that life insurance policies become an afterthought. Death or severe injury of a person who pays alimony could incur serious financial hardship to the former mate and the children.
Splitting couples can stave off potential problems by including careful direction about life insurance policies in divorce agreements.
Ensuring adequate support with insurance coverage
A divorcing spouse who will receive support must consider all future childcare expenses and investments. Expenditures may include higher education, weddings, debts and inheritance. Florida courts often mandate that the spouse paying support obtain life insurance. The level of coverage depends on the other individual establishing the extent of necessary support. A person may wish to sacrifice other assets as a bargaining tactic to secure adequate insurance.
The party paying alimony should acquire a policy before finalizing the divorce for a complete picture of cost and available coverage. The individual may not qualify for coverage or have prohibitively high premiums, so the other party may prefer to bargain for another asset to compensate for the lesser coverage.
Working to keep the policy active
A supported individual does well to become the policy owner while the insured ex-spouse pays the premiums. This designation prevents the ex-spouse from making any policy changes without notice, such as adding or removing beneficiaries. Also, the insurer notifies the owner if payments are late. Insurers are usually willing to accept these provisions, which decrease the odds of a default on premiums.
Preparing for unforeseen occurrences after a divorce typically means obtaining a substantial life insurance policy. Divorcing couples can stave off future messy complications by attending to this necessity.
