Robert G. Smith, PLLC

New insurance products protects divorced spouses

Sometimes, New York judges order the party who is responsible for paying child support to have a life insurance policy on him or her that will provide proceeds to the custodial parent if he or she dies. However, most courts have not thought of the possibility of the paying spouse becoming disabled and being unable to continue with child or spousal support payments.

While some workers have disability insurance, this type of insurance tends to only replace about 40 to 60 percent of the employee's income. If they happen to get a divorce, it can be difficult for this employee to make previously-ordered spousal and child support payments when only having about half of his or her previous income. However, a new insurance product seeks to remedy this dilemma. It is positioned as a product that will help fulfill the terms of a divorce decree. It provides insurance in case the paying spouse becomes disabled. Typically, this insurance can be purchased for up to $1 million in coverage. The need for medical exams is typically minimal.

Without such a divorce insurance product, the spouses' only remedy is to attempt to modify the divorce decree based on a material change in financial circumstances. This can be costly for the disabled person and disheartening for the other spouse who relied on the payments to sustain his or her lifestyle. However, parties may agree to include such insurance as part of their divorce decree and negotiate over which spouse should be responsible for the premiums.

Individuals who are going through a high-net divorce may want to take extra precautions to make sure that their obligations can be met. They may choose to talk to a family law lawyer who can explain different provisions that may be included in a divorce decree to provide extra protection in case of death or disability.

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