Many married couples carry at least one life insurance policy. Often, the spouse who earns the most money will carry a policy that lists his or her spouse as the beneficiary along with any children.
If you’re getting a divorce, it’s understandable that you might balk at the idea of keeping an ex-spouse as a beneficiary on your policy. However, if you have agreed or been ordered to pay spousal and/or child support, you may be required to maintain a life insurance policy that will provide continued support payments if you pass away.
If you don’t currently have a life insurance policy, you may be ordered by a judge to get one and to list your ex-spouse as the beneficiary to ensure that your family won’t be destitute if the primary wage-earner dies.
If the life insurance policy is court-ordered, the order will likely stipulate how long you have to maintain the policy, at least with your former spouse as beneficiary. Generally, you will have no legal financial obligation to your children once they are grown. If the policy is ordered to provide for continued spousal support, it’s termination will be dependent on how long you’re required to pay alimony.
Whether you reach an agreement during settlement negotiations or whether it’s court-ordered, it’s essential to understand the terms and to make sure that the life insurance policy is written appropriately. Your insurance agent can help you set up the right policy and work together with you and your Arizona family law attorney to assure that you are in full compliance with your divorce judgment.