Divorce is rarely a pleasant matter. Even the most clear-cut divorce is upsetting to the individuals. If children are involved, a stressful matter is even more difficult.
One issue that often pops up in divorces where children are involved is child support. A growing trend involves taking out life insurance for divorce settlements to ensure child support is never going to be an issue.
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When a couple (same-sex or straight) separates, it is important to think about what happens to the children if one party dies. This is especially true of couples where one is paying child support. Should something happen to the party paying child support, children may suffer without that monthly stipend.
To prevent a situation like this from occurring, many divorce settlements now include a stipulation that the party purchases a life insurance policy so that children will be financially supported should anything happen.
Instead of a single mom or dad having to support the children without the financial assistance of the other parent, the life insurance policy will help ensure child support payments remain up-to-date until the child's 18th birthday.
With these life insurance policies, it is important to add provisions stating that the beneficiary cannot be changed or the policy cannot be allowed to lapse. Many times, bitter spouses stop paying or remarry and change the beneficiary. Adding a provision that states if this occurs, the original beneficiary is entitled to an equal share of the estate helps. Another option is to go back to the divorce courts for a violation of the divorce decree.
As long as it is clearly stated in the divorce decree that a life insurance policy is part of the divorce settlement, your rights are protected. While there is no system of checks to ensure the party is paying on a life insurance policy and has not changed your name as beneficiary, you can keep track yourself. If you find something has changed that violates the divorce decree, all it takes is one simple call to the lawyer's office.
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If you've already been divorced and a life insurance policy was not included in the decree, chances are slim that the courts would be willing to change things years later. If your financial situation changes, you may be successful in getting the court to add a modification to the original divorce decree. Be warned that you will need to have solid evidence proving the necessity for a life insurance policy at this stage.