Life insurance in divorce proceedings

On Behalf of | Aug 1, 2022 | Family Law |

When someone recently marries or welcomes a child to the family, purchasing a life insurance policy seems advisable. Not everyone thinks about life insurance when filing for divorce, though. Since both spouses may focus on the problems in their marriage and the steps necessary to end it, neither partner might consider taking out a new policy or changing a current one. However, a Texas judge could order a spouse to purchase a policy.

Life insurance as part of a divorce decree

Life insurance serves as a way to protect a beneficiary from financial hardship when the policyholder passes away. So, if one spouse passes away during the marriage, a life insurance settlement could cover many expenses for the surviving beneficiaries. The compensation might cover several years of living, medical and educational costs depending on the life insurance policy amount.

When spouses divorce, one spouse may agree to a specific amount of alimony. The divorce settlement might also involve an agreed-upon amount of child support. Both an ex-spouse and any children from the marriage could rely on those payments to cover necessary essentials. If the spouse dies, support payments end. However, a life insurance policy could provide financial security that replaces support payments.

Divorce decrees and life insurance

During divorce proceedings, one or both spouses may purchase an insurance policy that pays out a pre-determined amount of money upon the policyholder’s passing. Anyone buying a policy might look at the options available and consider paying additional for added accidental death or dismemberment coverage. Doing so may further help an ex-spouse or child in the case of an unforeseen disaster.

A judge could issue an order regarding buying life insurance if both parties cannot agree during settlement talks. Both parties might find it in their best interests to reach a reasonable and equitable agreement.