Most divorce agreements contain exhaustive provisions for alimony and/or child support, but many of them fail to address the continuance of financial support in the event of the payor's untimely death. For some reason, life insurance seems to slip through the cracks when spouses are contemplating divorce, although it's one of the first things they address as a married couple. However, maintaining a life insurance policy for the duration of one's alimony and child support obligations is essential for those who have young children, or are receiving long-term or permanent alimony.
Of course, even if it's written into the divorce agreement, making sure that the responsible party pays for it is a separate matter. It's not uncommon to see former spouses purposely “drop the ball” on the payments or cancel the policy altogether, while the receiving spouse is totally unaware, since the insurance company sends all correspondences to the policy owner, i.e., the paying spouse. Supported spouses can, and should have it written into the divorce agreement that the paying spouse must provide periodic proof that the policy is being maintained. This way, if he or she becomes evasive, or refuses to provide proof after the divorce, the supported spouse would have the right to file an enforcement motion.
The court may issue a wide range of sanctions for violating the terms of a divorce agreement, but most sanctions are financial in nature. LIfe insurance, however, is a tricky situation because the mere issuance of fines is unlikely to prevent the paying spouse from dropping the policy again in the future. Many judges have it found it far more practical to order the paying spouse to maintain a policy in the name of the supported spouse/ other parent, thereby allowing the supported spouse to receive all communications related to the policy. The judge may issue additional sanctions, such as financial relief in the amount that should have been paid as premiums . The offending spouse may also be directed to pay the other party's court costs and legal fees, which could be substantial depending on the length of the hearing.
The continuance of a life insurance policy after divorce is a touchy subject for both paying and supported spouses. Many paying spouses find it unfair to continue a policy they no longer want, especially when they're already paying high amounts of alimony and child support. On the other hand, supported spouses and their children have the right to expect some level of financial protection in the event of the paying spouse's death. While there's no law requiring the continuance of life insurance as a means of continuing domestic support payments, paying spouses can, and have often been ordered to do so by the courts. Thus, it's important to find out about your rights and legal options from an experienced divorce attorney. For more information on alimony and child support, please schedule a free consultation with the attorneys of Villani & DeLuca, P.C.