When New Jersey couples divorce, alimony and child support are frequently at issue. There are other aspects to remember such as needing to have specific documents like life insurance.
A judge can order a life insurance policy
After a divorce, there could be a requirement that there be a life insurance policy in place. This is to ensure that the former spouse and the child are provided for in the event of the supporting party’s death.
Just as child support is calculated to meet the child’s needs until they reach adulthood, the life insurance policy must be sufficient to do the same if the supporting parent dies. The basics such as clothing, food and shelter are covered, but so are childcare costs, uninsured medical expenses and extracurricular activities. The policy can account for all potential needs.
The child’s age will be assessed. A toddler would need support for a longer amount of time than a teen. In some instances, the policy can be designed so it reduces in value as the child approaches the age of majority.
Alimony can be covered through life insurance. Since many alimony orders have a defined duration as part of the divorce, the policy will account for how much and how long it is being paid. Health factors, age and life expectancy are also analyzed in the policy and how much it will pay.
Understand how life insurance can be part of a divorce
Life insurance is not often discussed as part of a divorce, but that does not diminish its importance. People need to be aware of how and why taking out a policy can be ordered in the case. This is key to reaching a reasonable settlement. Both sides need to be adequately prepared.