Maintaining Life Insurance
In most cases, life insurance is maintained by both parties post-divorce. In regard to the payer spouse, we advise the payer spouse to maintain life insurance in an amount sufficient to cover child support payments from the date of divorce to the date the child will be emancipated. There are many other costs that go into what that spouse is responsible for during that time period, including uninsured medical bills, college tuition, cost expenses and so forth. If I calculate the child support out – depending on the age of the child and the anticipated date of emancipation – it could come to $250,000. Then I would recommend a $250,000 life insurance policy.
It is important to check because many lawyers do not check the term of the policy. You want to make sure that whatever policy they have is going to last until the emancipation of the children. That can also be an employer provided policy, but nobody can guarantee that they will be with that employer until the child is emancipated. It does not have to be just an employer provided policy that the payer spouse has to maintain; it has to be maintained regardless of whether the person is employed.
With regard to the recipient spouse, their services to the children also have a value. If you have a stay-at-home spouse or stay-at-home parent, you have to think about what it would cost to replace that spouse’s services in the event of a death. You have to look at anticipated day care cost and other services that person provides, whether it is mowing the lawn, or cooking meals, and then figure out what the actual needs of the children will be. Evaluation of that aspect is little harder than evaluating the anticipated child support payments. In most cases, what we do is to look at what one spouse maintains, then the other spouse has to maintain.
Another factor in life insurance is whether they already have life insurance policies and how long the term is with those life insurance policies and the cost of those policies. If the parties felt that they needed life insurance during the marriage that view wouldn’t change by either parties or the court because if they needed it during the marriage, then they need it post-divorce as well.