Insure the Payments

Amid the wind and waves of a divorce, life insurance is not something people think about. Both the custodial and noncustodial parents should consider life insurance to protect their children.

Very often in a divorce settlement, life insurance on the former spouse responsible for alimony and/or child support is overlooked. The paying spouse may intend to comply with the divorce agreement, but death has other plans.

The same is true for the custodial parent. The noncustodial parent may not be able to afford complete care of the children.

The insurance may not be an insignificant amount either. A custodial parent receiving even a few years of monthly spousal support and child support for small children may need to be insured for $250,000 or more. To determine the appropriate amount, a “present value” calculation yields the desired monthly payments needed and inflation considerations. Term insurance (for the period of payments required) is usually a good and least expensive choice as well.

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