Separation agreements, or Final Orders in divorce and child support actions, commonly require spouses paying child support or alimony to maintain life insurance on themselves. Why? Because this provision ensures that such payments will continue after death.
Typically, a life insurance provision will require the paying spouse to maintain life insurance in an amount that covers his or her remaining financial obligations. A separation agreement may contain a provision similar to this one:
Defendant will obtain a collateral life insurance policy within thirty (30) days after the Final Judgment and Decree of Divorce is entered and will name Plaintiff as beneficiary to the extent of Defendant’s child support and/or alimony obligations as defined in this Agreement.
Notably, compliance with this provision occurs after the divorce is finalized. Therefore, it is critical you ensure your ex-spouse continues to comply with the provision by maintaining life insurance. Below are five tips for life insurance after divorce.
- Be Sure You are the Beneficiary. If your ex-spouse is court ordered to pay alimony and/or child support, read the separation agreement carefully to ensure he/she is required to name you as the life insurance policy’s beneficiary. This will guarantee your support in the event your ex dies. It is not enough simply to require your ex to maintain life insurance.
- Include a “Required Proof” Provision with a Specific Date for Compliance. There should be specific language in the agreement that requires your ex to provide annual proof that his or her policy is still in effect and is unencumbered by any debt. This will ensure that the premiums have been paid, the policy has not been canceled, and that you are still protected.
- Get a Release from your Ex to Contact the Insurance Company Directly. To avoid policy cancelation due to unpaid premiums, you can ask your divorce lawyer to draft a release form for your ex to sign. This will grant the insurance company permission to give you information about the policy, including if the premiums have been paid. This form should be attached to the Agreement as an exhibit, so there is no question as to whether the insurance company has permission from your ex to provide his/her insurance information.
- Obtain a First Charge against Ex’s Estate. If you are worried that your ex will fail to maintain life insurance, you can include a condition in your separation agreement where the unpaid premiums and financial obligations will be a first charge against your ex’s estate if he or she fails to maintain life insurance.
- Email Your Ex a Pre-Written Letter. Communicating with your ex can be emotional and uncomfortable. However, if you have a pre-written letter that requests proof of life insurance (as required by your agreement) you can simply forward the message in a quick, stress-free manner. You should send the email with a certified receipt to ensure that your ex received it.
The above tips are important. Not only do they ensure your ex complies with the life insurance provision in your Settlement Agreement or Final Order, but they also offer you peace of mind in your post-divorce life.
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