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 Posted: Fri Jun 19, 2009 10:36 am Post subject: How to secure life insurance even after divorce? |
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I’m currently undergoing the process of divorce from my husband. I just want to make sure that he maintains life insurance on the kids. How can I make it sure? Can he violate the court order and change the beneficiary in the near future? Would my children then have the right to contest the beneficiary state whomever it is assigned to?
Thanks,
Sarah
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OperaGirl
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| Posted: Fri Jun 19, 2009 11:21 am Post subject: |
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1) Make it part of the divorce decree.
2) You should be the owner of the policy with your ex-husband the payer. This way, only you can make changes and you'll know if the policy isn't being paid. |
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InsuranceExpert
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| Posted: Sat Jun 20, 2009 5:37 am Post subject: |
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Hi Insurance Expert,
| Quote: | | You should be the owner of the policy with your ex-husband the payer. This way, only you can make changes and you'll know if the policy isn't being paid. |
Does that mean the policy would have me as the name insured when he would pay the premium to keep it active? Or, the term 'policy owner' means that I'd have the possession of the policy document only?
Who should the policy name as beneficiary? Can my husband add himself as the beneficiary since he would be paying for it?
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OperaGirl
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| Posted: Sun Jun 21, 2009 12:05 am Post subject: |
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If you are the policy owner, then you are the only one that can make changes. Your husband would not be allowed to make himself a beneficiary for two reasons:
1. He's not the owner of the policy
2. The life insurance will be paid upon his death...they can't pay a dead person
I have seen many different ways to do it, and here is my suggestion. Have it mandated in the divorce decree that he mantain adequate life insurance so that it could continue to support the children should he pass away. The beneficiary should be a trust for the children, and the trustee can either be you as the mother...OR if he is not comfortable with it...most judges will allow him to assign an impartial trustee so that you may not misuse the funds.
I have seen many cases where the policy gets paid to the trust. The trustee pays the regular amount to the surviving spouse for child support, and then the remainder is used for the sole benefit of the children (college expenses, etc.)
Just be specific and make sure you understand the implications of any components of the decree! |
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ChrisBantly
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| Posted: Sun Jun 21, 2009 12:26 am Post subject: |
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| Quote: | Does that mean the policy would have me as the name insured when he would pay the premium to keep it active? Or, the term 'policy owner' means that I'd have the possession of the policy document only?
Who should the policy name as beneficiary? Can my husband add himself as the beneficiary since he would be paying for it? |
Your husband would be the insured. You would be the owner. It is the owner that has complete control of the policy. He could not change the beneficiary. Your husband would be paying for the policy, but since you are the owner, you would know if the premium wasn't being paid.
Most likely, a trust for the benefit of your children would be the beneficiary of the policy and you would be the one in control of the money in the trust. |
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InsuranceExpert
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| Posted: Sun Jun 21, 2009 12:30 am Post subject: |
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| Quote: | | I have seen many different ways to do it, and here is my suggestion. Have it mandated in the divorce decree that he mantain adequate life insurance so that it could continue to support the children should he pass away. |
It should be mandated, but the problem is if he drops the coverage, she'll never know unless she is the owner. It should be mandated, but she should be the owner.
Even if she does find out, he may not be able to get the policy back in force. |
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InsuranceExpert
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| Posted: Mon Jun 22, 2009 1:58 am Post subject: |
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I actually saw a case in which the husband and wife were getting a divorce. They had two children (12 and 14). The judge not only required that the husband carry life insurance, but also required that he pay for the policy for 6 years. Part of the assets he received as settlement were reduced and the policy was purchased.
In this case, the wife was the owner of the policy...AND there was no chance that the husband could stop paying! See if the judge would be willing to set something up, OR have it mandated that he pay the premium to you as part of child support. If you're able to do it that way, should non-payment ever become an issue...you'll know about it and have legal recourse.
(Recourse depends on state, but could include wage garnishment, etc.) |
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ChrisBantly
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| Posted: Mon Jun 22, 2009 5:54 am Post subject: |
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How can I go about assigning myself as the owner of the policy? What rights would I have as the owner? Would the policy document have my name in it as the owner of the plan?
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OperaGirl
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| Posted: Tue Jun 23, 2009 4:23 am Post subject: |
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You won't be able to assign yourself as the owner. If your husband is the current owner of the policy, he will have to name you as the owner. This is why you may need a court order or a specific request from the judge to help you do so.
The policy would clearly state that you were the owner. As owner, you would be the only one allowed to change beneficiaries and make any other changes. You would also be able to monitor and see if the policy was being paid on time and consistently. |
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ChrisBantly
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