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Should you seek court-ordered life insurance in your divorce?

On Behalf of | Jan 23, 2022 | Family Law |

If you’re going to be partially financially dependent on your soon-to-be-ex for a time after divorce for child support, you will want them to have a life insurance policy. This requirement can be included in your divorce agreement. 

A life insurance policy, when properly established, can ensure that your children will continue to receive the support that’s been ordered or agreed upon if your co-parent passes away. The policy needs to state that your child – or a trust for them – will be the sole beneficiary of the policy and that the proceeds of the policy may only be used for their benefit.

Can you obtain a policy on them?

If your spouse doesn’t agree to this and the court doesn’t order it, it may be possible for you to obtain a life insurance policy on them. However, this is more complicated.

A person can’t take out a life insurance policy on someone else without their permission or knowledge. That could lead to all sorts of nefarious behavior, as classic movies have taught us. If your spouse agrees to let you take out a policy on them (and since you can show financial dependence on them), it shouldn’t be a problem. However, you’d be the one responsible for the premiums.

A court-ordered policy can provide requirements

It’s typically best to seek court-ordered life insurance as part of your divorce. Generally, the court will place some requirements on the insurance, such as the amount of the policy, the term (for example, until your child turns 18) and a deadline by which proof of the insurance must be provided to the court. (Note that court-ordered policies can be sought to protect spousal support as well.)

It’s wise to have some guidance from an insurance agent regarding life insurance and potentially other types of insurance that might be needed to ensure at least partial child support in addition to legal guidance. You want to make sure that you and your children don’t suffer financially if your co-parent is no longer around.