How Life Insurance Works After Divorce:
Protecting Child Support & Alimony Payments Pt. 2 –
Life insurance could be one way to prevent this from happening. If the paying ex-spouse has a life insurance policy, it could be used to replace the lost child support and alimony payments after their death. The most effective plan would have a benefit sum that could replace these payments until the youngest child is at least 18. If no payments are made to a life insurance policy, then it becomes invalid. Should you believe that your ex may not make the monthly payments, it would be in your best interest as the primary custodial parent to take the plan and pay the premium so the policy remains valid.
There are many questions that come along with securing a life insurance policy as child support. What are the benefits of funneling the insurance policy into a trust? What could the potential drawbacks result from designating the child as the beneficiary? What happens if the policyholder changes beneficiary designations? These are all questions that should be brought up to an experienced family law attorney and addressed in the separation agreement.