It may seem like everything will work out fine once you and your spouse have worked out a child support and spousal support plan as part of your divorce settlement. However, just because you have a support plan in place does not mean that something might not happen to cause your ex to stop making payments to you. This is why it is important to consider a life insurance policy for your spouse.
Even if your former spouse is young and has many years of earning potential left, an unexpected illness or auto accident could disable your spouse or even cause your spouse to die. This could end your support payments and leave you in a bad financial position.
Why life insurance may help
According to Forbes, before you complete your divorce, you may work out an arrangement to take out a life insurance policy on your spouse. In the event your ex-spouse dies, the policy will kick in and provide you with support. If you have children, you may arrange that the insurance policy name them as beneficiaries, ensuring that they will have support as well.
There will be a number of details you will have to work out before purchasing the policy. You will have to decide who should own the policy, you or your spouse. If you own the policy, you can keep control of it and prevent your spouse from making changes to it. Since there are many kinds of life insurance on the market, you and your spouse will also have to choose the type of policy that will fit your situation.
Considering options other than insurance
Creating a life insurance policy for your spouse is something to take care of before the divorce is complete. You may find out that your spouse cannot afford a policy or insurers will not qualify your spouse for a policy. If so, you might need to work out alternatives for you and your children to receive support in the event your spouse dies. Some alternatives for paying spouses include making payments to an annuity that will pay out to the recipient spouse, or paying money into a constructive trust.