Life Insurance and Divorce

Recently, I was contacted by two insurance agents regarding life insurance.  Both insurance agents had similar questions regarding life insurance and divorce.  First, they wanted to know whether courts require child support obligors to obtain and hold life insurance policies for the benefit of the children, in the event that the obligor passes away.  Basically, the answer to this question, as written, is “no.”  The insurance agents were taken aback by this.  They were appaulled by the fact that if something happened to the obligor, the parent caring for the children would be left with no support or help.

While I certainly understand their concern, my response is that many of my clients (and their ex-spouses) can’t afford to pay their court ordered child support, let alone an additional insurance premium each month.  If an untimely death occurs, the beneficiaries of the obligor’s estate may have a wrongful death suit, which would reduce or eliminate the need for the life insurance policy.   (Of course, the insurance agents could probably come up with a list of the benefits of having the insurance policy in place, despite the above statements.  I’m not saying there aren’t any, I just have to keep in mind that my clients have budgets & priorities).

There are many shortfalls of our court system and especially our domestic relations divisions; however, I would not categorize this as a shortcoming of the court system.  If you believe this to be a short coming, it is really a short coming of the attorneys working in the domestic relations court system.  When I am filing a divorce for a client that is asking for custody and child support, the opposing party either has a life insurance policy in place or he/she does not.  If they do have a life insurance policy in place, I usually include in the decree that the party is required to keep the life insurance policy for the benefit of the children until the youngest child turns 18.  When this is included in the decree, the court will generally grant this request.

If the opposing party does not have a life insurance policy, I do not usually address whether he/she wants the other party to be required to obtain one.  Often times, if there is not a policy in place already, that is because there is no money for a policy.  It is not guaranteed that the court will grant the request for the order requiring the other party to obtain a life insurance policy and it may cost more in legal fees to persuade the court that such a provision is necessary.  In addition, as with any provision in the decree, such a provision is only enforceable by contempt of court.  This means that even if the court grants an order requiring that the opposing party obtain a life insurance policy for the benefit of the children, if he/she chooses not to get one, the plaintiff can only enforce it by filing a motion to have the other party held in contempt and by doing so, will incur more legal fees.

My personal opinion regarding insurance is that you can’t insure your entire life.  Bad things are going to happen, unexpected tragedies are going to occur, and losses will result.  I personally don’t like the idea of paying a premium every month to minimize that damage because there are always going to be aspects of your life that you cannot insure, or that you don’t insure (and with my luck, those are the aspects that will be affected when bad things happen).  However, I did appreciate that these insurance agents brought this issue to my attention.  Just because I personally don’t beleive in insuring all aspects of my life, it doesn’t mean that my clients may not benefit from discussing this issue with a knowledgable professional.

In the future, I will be discussing life insurance with my divorce clients and hopefully, they will learn and benefit from it, even if they choose not to request that the other party obtain a life insurance policy.