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Should You Own Life Insurance to Protect Alimony and Child Support?
Many people are unaware life insurance can actually be used as a part of a divorce settlement.
Though it’s easiest to include it as part of the divorce settlement, it can also be incorporated even after a divorce has already been finalized.
The main way life insurance is used in a divorce settlement is to protect alimony and child support.
Without a life insurance policy, your alimony or child support suddenly stops. This can be a life-changing moment as you’re now left scrambling to maintain your finances.
Life insurance helps ensure your alimony or child support continues even after your ex-spouse dies.
Simply put, life insurance to protect alimony and child support is a great idea to help you prepare for the unexpected and stay financially safe when unforeseen circumstances arise.
How is Alimony and Child Support Determined?
Husband and wife separate. They are mature, responsible adults who want the best for their children, so they are able to quickly establish an informal custody schedule that enables both parents to spend meaningful time with the children.
Husband and wife both work, but husband’s earnings are far greater than wife’s. The parties agree, in principle, that husband will pay child support.
Husband consults with an experienced family law attorney to determine how much child support he owes.
Buy your own policy to keep your children safe!
Including life insurance as part of a divorce settlement starts with buying your own life insurance.
You must make sure you are covered since you’re not only the caretaker of your children, but also the main monetary provider.
If you die unexpectedly, your children will continue to need financial support. Life insurance ensures they will continue receiving this support even when you are no longer around.
Of course, your sudden absence will still have a huge impact on your children, but at least your children will still have a sense of financial security.
Make sure you setup your insurance policy correctly!
Your children are the main reason you bought your life insurance policy.
This means both the plan you buy and the way its set up must put your children first. You need to ensure they are the ones with access to the benefit, or at least the person responsible for the money can only use it as you intended.
Simply put, you must make sure your children are the only ones who will be able to utilize the money left to them from the life insurance policy.
Both Single mothers and single fathers are covered
It’s important to note both single mothers and single fathers can benefit from life insurance to protect alimony and child support.
Just as mothers can buy life insurance on their ex-husbands, so can fathers buy life insurance on their ex-wives. The same rules apply no matter the specific scenario.
Life insurance can be an essential component of your divorce settlement. A policy bought on your ex-spouse will ensure alimony and child support payments continue even if they unexpectedly die.
This death benefit guarantees you and your child will not be put under any undue financial stress in the event of their death. You will be able to move forward with the financial stability you deserve.
You should also consider buying life insurance for yourself. This further helps protect your child in the event you yourself die.
Combining personal life insurance with life insurance on your ex-spouse provides the best overall financial protection to your children.