When two people go through a divorce, money matters are often a top priority. For some, alimony is an important component of a financial settlement. Having access to ongoing spousal support payments can make a world of difference in the budget of a spouse who set aside his or her own career goals to raise a family or support the career path of a partner. However, many Maryland residents fail to understand the importance of insuring those payments.
Consider what would happen if alimony payments simply stopped? If the spouse tasked with making those payments simply refused to pay, then the receiving spouse would have legal recourse in the matter. But what if the paying spouse passed away prior to the end of the agreed-upon alimony term? What would the receiving spouse do under those circumstances?
If adequate life insurance was purchased on the supporting spouse, then the value of the alimony payments would be available to the receiving spouse. That could make it possible to continue covering living expenses, as well as other financial needs. In short, the recipient would be able to go on in much the same way as normal.
Negotiating a life insurance policy can blend right into the larger property division and alimony discussions. Each Maryland couple will have a different way of addressing the matter, but most will agree that having a measure of protection in place is a wise financial move. It should also be noted that insurance can help ensure that the value of child support payments is made available to a surviving spouse if need be.
Source: CNBC, “Headed for divorce court? Here are your top 5 financial musts“, Andrew Osterland, Dec. 22, 2016