Life insurance and divorce proceedings
On behalf of Barli & Associates LLC posted in alimony on Thursday, January 25, 2018.
Imagine your ex-spouse is paying you alimony and child support each month. Your spouse is regular with his or her payments, and the extra money is the only thing that keeps you and your children afloat. Now, imagine your spouse suddenly dies and you stop receiving alimony and child support.
This could result in your financial devastation, but if your spouse also purchased a life insurance policy and named you and your children as beneficiaries. However, it could help you make it through such a difficult situation.
To protect against the financial difficulties associated with an ex-spouse prematurely dying — and the associated loss of child support and alimony payments — New Jersey courts often require the payers of child support and alimony to purchase life insurance. Life insurance may also be negotiated by spouses in an out-of-court settlement.
The length of the life insurance may depend on various factors. For example, if it’s a life insurance policy to cover child support payments, the policy will usually extend to when the child reaches 18 to 21 years of age. If the intention is to cover alimony payments, those payments will extend until the alimony payments come to a stop.
Many New Jersey spouses are alarmed by the need to purchase life insurance as a part of their divorce proceedings. However, upon further investigation, spouses will learn just how common and useful this practice is.
If life insurance is an issue in your divorce proceedings or divorce settlement negotiations, make sure that your family law attorney explains your legal rights and options so that you fully understand them.
Source: True Blue Life Insurance, “Court-Ordered Life Insurance in Divorce,” Brian Greenberg, accessed Jan. 25, 2018