If you and your spouse have a life insurance policy, it may be treated as a property interest if it has a cash value. Some life insurance policies do not have any cash value, and the parties have to determine who shall maintain the policy or if shall be terminated. Be sure that you check to see who the beneficiary is of the policy(ies) that you have, so that the proper beneficiary is named after the divorce or separation.
In the context of child support, the person who pays child support will have an obligation to maintain a life insurance policy to insure that person’s share of child support, medical, and college expenses are covered in case of that person’s death. If the person who is paying child support does not have affordable life insurance offered by that person’s employer, the Court may not require it.
In some instances, both parties will agree to maintain a life insurance policy to cover that party’s share of child-related expenses. The beneficiary of the policy will be the other spouse as Trustee for the Benefit of the Child(ren). You can add up the financial obligations of the parties to determine what the value of the policy should be. The settlement agreement can be drafted in such a way to reduce the obligation of the party who is providing the life insurance as the years go by and payments are being made. The principal amount of the policy can be decreased and terminated as to that beneficiary when the obligations have been met.
Maintenance is also a financial obligation that the paying person may have to cover with life insurance.
Health Insurance And Disability Insurance
The person who pays child support is required to make and maintain a child as a beneficiary on a policy of health insurance that is available to that party on a group basis (employment related, for example) or on an independent basis. The Court will consider the following factors:
- The medical needs of the child
- The availability of a plan to meet those needs
- The cost of such a plan to the obligor.
If the person ordered to provide health insurance does not so, and the child incurs medical expenses, that party will be solely responsible for those medical expenses. If that party did have an appropriate health insurance policy, it is customary for the parties to share those out-of-pocket expenses. The party providing the policy needs to keep the other party updated on the policy information.
Homeowners, Renters And Auto Insurance
A home or automobile is an asset. Maintaining insurance for such property is necessary to maintain that asset, including liability insurance in case of an accident. If, for example, a party decides not to pay auto insurance, and the other party either does not know that insurance was canceled, or could not afford to pay the insurance themselves, the canceling party may be fully responsible for any loss in relation to that vehicle after the insurance was inappropriately canceled.[/fusion_text][separator style_type=”none” top_margin=”30″ bottom_margin=”30″ sep_color=”” border_size=”” icon=”” icon_circle=”” icon_circle_color=”” width=”” alignment=”center” class=”” id=””][blog number_posts=”” offset=”” cat_slug=”divorce-and-insurance” exclude_cats=”” show_title=”yes” title_link=”yes” thumbnail=”yes” excerpt=”yes” excerpt_length=”35″ meta_all=”yes” meta_author=”yes” meta_categories=”yes” meta_comments=”yes” meta_date=”yes” meta_link=”yes” meta_tags=”yes” paging=”yes” scrolling=”pagination” strip_html=”yes” blog_grid_columns=”3″ blog_grid_column_spacing=”40″ layout=”medium alternate” class=”” id=””][/blog]