Marriage and Divorce
Marriage and divorce are both common experiences. In Western cultures, roughly 90 percent of people get married before they turn 50 years old. According to the American Psychological Association, healthy marriages are good for physical and mental well being. They are also good for children. Growing up in a happy home protects children from a variety of developmental problems. However, about 40 to 50 percent of married couples in the United States get a divorce and the divorce rate for second or third marriages is even higher.
Divorce Devastation
Even a peaceful divorce can be economically devastating when factoring in the costs. You need to maintain separate living quarters, there could be a loss of income, there are likely going to be credit and debt issues, and counseling might be necessary if there are children involved and that’s the upside. An angry divorce could include all of the aforementioned plus leave you with a stack of costly legal bills.
- The end result: divorce reduces a man’s standard of living by about 10 percent and a woman’s by about 30 percent, according to the National Marriage Project at Rutgers University.
Life Insurance Needs in Marriage and Divorce
Most married couples carry a life insurance policy to provide for their spouse and children should they die, but that need doesn’t simply disappear once the marriage has ended.
Typically, the primary breadwinner in the family will purchase life insurance and list their spouse and children (if they have any) as beneficiaries on the policy. The spouse who is financially dependent on the other will then receive the death benefit on that policy when the spouse dies. The insured, on the other hand, have the peace of mind of knowing their family will be taken care of financially when they are gone.
The need for life insurance changes somewhat when you are getting a divorce. In most cases, part of the divorce settlement process lies is granting alimony and child support to the spouse who depends on the other one financially. Alimony payments are designed to help the dependent spouse maintain the lifestyle they have been accustomed to, while child support is set up to help cover child care costs and any other expenses that are associated with being a full-time parent.
If the primary wage earner paying the alimony or child support were to die, the dependent spouse could have a devastating financial burden if their ex-partner didn’t have any life insurance. This is how court-ordered life insurance policies to cover spousal support come about.
What Is Court Ordered Life Insurance?
It’s understandable why someone would not want to carry a life insurance policy if they were involved in a bitter divorce. They feel like their ex-spouse will be benefiting from their death and if someone is already upset about paying alimony, their mood isn’t going to improve if they are ordered to purchase and maintain a life insurance policy with their ex as the beneficiary.
In divorces that include provisions for alimony or child support, it is common practice to include a stipulation that the supporting spouse should, in fact, carry a life insurance policy with their ex as the beneficiary. This can assure the children will be taken care of should the supporting parent die and it’s particularly important if you suffer from a past or present medical condition. Therefore the court orders you to carry divorce maintenance insurance for a specific period of time to make sure this commitment is met.
How long the policy is maintained depends on what it was intended for.
- If it was supposed to be a safeguard for child support, it can be terminated when the dependent children reach the age of majority. Depending upon your state law, this usually happens at some point between the ages of 18 and 21. (Life insurance policies can be maintained for longer periods of time if the parent chooses to do so.)
- If alimony insurance is necessary to assure alimony, it could continue for as long as the alimony payments are required and there is no clear-cut answer for how long that support lasts. Each state has different rules regarding alimony and every family situation is different.
Is Life Insurance Required for Alimony?
There are some situations when the court may order a life insurance requirement for alimony payments when there is a demonstrated need to protect the recipient.
Reasons most cited in divorce agreements for alimony protection:
- Previous cases of failure to pay alimony
- The paying spouse is much older
- Dangerous hobbies or occupation
- To protect against a disability or illness
- Wealth tied up in property or trust
The amount of coverage required in a court ordered life insurance policy would be related to the extent of the obligation, but the court must also consider the financial impact of paying insurance premiums.
Can My Husband or Wife Remove Me From His/Her Life Insurance?
- If the policies in existence at the time of death fail to comply with a court order to maintain life insurance after the divorce decree or support agreement was made, there are many examples of courts that ruled that the beneficiary named in the decree or agreement is entitled to recover proceeds according to the beneficiary rules after divorce.
- If the Judgment of Divorce requires your spouse to maintain life insurance and he has failed to do so, you will have to file a Motions to Enforce the Litigant’s Rights to have the Court compel him or her to reinstate the coverage.
Your Court-Ordered Life Insurance Policy
Talk to a licensed independent life insurance agent about your divorce maintenance insurance. If the court has ordered you to purchase a life insurance policy, an independent agent is going to work with you to get the best policy for your particular situation at the best rate, no matter the time frame. Just let the agent know the desired policy is court ordered and the date it is expected to be active.
- If you are in a hurry, an instant issue life insurance policy is an option.
- If you need a policy of over 1.5 million, a medical exam is required for a level term life insurance policy
- If you are uninsurable and still require life insurance, stacking several guaranteed issue life insurance policies together is possible.
- Group life insurance is an option for those under 50 years old.
- If you want a no medical exam life insurance policy, but have medical conditions, it is best to contact an independent agency.
Best for Instant Decision Life Insurance to Cover Spousal Support
Ethos Life Insurance
Ethos sells instant issue term life insurance policies online. You complete the full application online and receive an instant decision.
The application asks about your lifestyle and health to avoid requiring a medical exam. The company also uses public reports and algorithms to decide and set prices.
The Austin-based company launched in 2016 and now operates in all 50 states.
Product details:
- $50,000 to $2,00,000 in coverage
- 10, 15, 20, and 30-year options
- 20 - 64 years of age
Pros
Best priced instant decision term life insurance
Some of the other options are Haven, Bestow, Ladder, and Fabric.
We think Bestow has the best prices and percentage of approved applicants.
Good for people generally in good health
A good fit for Bestow is a person 30 - 45 years old with no current health problems. Some medical conditions that are ok as long as they are controlled are high blood pressure, cholesterol, anxiety, depression, and sleep apnea.
You can change your term and coverage amount after you are approved
The actual cost of the policy is determined after the company approves you. The cost may be higher or lower than expected. It is a nice feature that you can tailor the policy to fit your needs without submitting additional information.
Easy Application
The simplified issue life insurance application takes 10 - 15 minutes, and you are done. You can apply in the middle of the night on your mobile phone and have coverage instantly.
You don’t need to talk to an agent
Some people don’t want to talk to an agent and be overwhelmed with questions and options. With Bestow, it is your choice whether you talk to an agent.
Cons
Not good for those with a history of disease
If you have a history of cancer, heart attack, stroke, cancer, immune disease, or diabetes, you are better off applying elsewhere. These conditions cause automatic declines.
No option to convert to a permanent policy later
Many life insurance policies allow you to convert to a whole life insurance policy without health questions during the coverage period. Unfortunately, this is not an option for the Bestow product.
Not for those over 60 years old
While the product is not available for those over 60, the closer you are to 60, the more difficult it is to get approved for a policy with Bestow. This is because of the increased risk to the insurance company, especially when issuing instant products.
