When couples separate with children, usually one party makes support payments. Support payments for Child Support, Children’s Special Expenses, Children’s Future Special Expenses (University, College or Health Issues), Spousal Support / Alimony, and other expenses or debt repayments, are paid by one party to the other party. Sometimes as children reach university or college age, a parent pays some of the child’s expenses directly to that child or directly to the university or college. Ex-family expenses and legal agreements vary. When children reside most of the time with one parent, that parent may have financial support obligations in the future. Having affordable Life Insurance is the best manner to secure support obligations.
Family Law frequently considers challenging situations, which are common. Some children switch primary residences as they get older. A child may have long term health needs. Parents may become sick and cannot work. Sadly, some moms and dads pass away at young ages. Whatever challenging situation may occur, children have ongoing financial needs until college or university years and usually need financial support from both parents and sometimes even grandparents.
Come To Agreement offers an innovative Family Law Support Insurance Program that secures support payments and financial obligations. Come To Agreement works with some of the largest Life Insurance companies to provide support payment security as required in Separation Agreements or Divorce Orders or as mandated by Family Court Orders.
Let’s explore 4 Life Insurance scenarios that secure support payments in Separation Agreements:
- When support payments for a child(ren) or an ex-spouse is required, the amount of the secured obligation decreases on a monthly or yearly basis, as payments are made. Therefore, the amount of Life Insurance required to secure the payments also reduces in tandem. Come To Agreement offers Rebalancing Beneficiaries Support Insurance (RBSI), which rebalances downwards the secured support obligation and increases proportionately upwards the insurance coverage to other beneficiaries such as the children or a new partner or new spouse, etc. This creates a Win/Win insurance policy for both ex-spouses. RBSI is the best option when there’s a date that support obligations conclude. Additional Family Law benefits are outlined in #4.
- As couples age and child support obligations are lowered or no longer required, Spousal Support / Alimony obligations are frequently increased, based on the ages of the parties, length of marriage or cohabitation, individual incomes, etc. In long-term relationships or marriages, Spousal Support / Alimony obligations can be for an indefinite period. When an obligation continues for many years and the support payor’s income typically declines when they retire, Life Insurance can still secure support payments. Traditional Life Insurance does not adequately serve the needs of both parties in this scenario.
- Many husbands and wives purchase life insurance during happier times and many have insurance policies that could provide security for future support obligations. The length of the existing term or the renewal cost for that policy should always be considered for future support obligations. If you have an existing Life Insurance Policy, Come To Agreement may be able to help amend your existing Policy to take advantage of the benefits of our custom Separation and Divorce Insurance Programs.
- There are two additional Family Law problems which Come To Agreement addresses in our insurance programs:
a) Current insurance privacy protocols don’t permit the Licensed Insurance Advisor to notify the Support Beneficiary when an insurance policy is about lapse due to lack of payment. Come To Agreement uniquely addresses this issue by proactively keeping the Support Beneficiaries informed, and giving them the option to keep the policy active by taking over payments on a temporary basis until the issue is resolved. This option is legally agreed to between the parties.
b) In Family Law, the Beneficiary of support payments is often shown as “Irrevocable” on the Policy. This has many legal disadvantages for the Support Payor. Sometimes, at the conclusion of support obligations, the Irrevocable party won’t release the Policy and the Policy Owner cancels the Policy. If their health is poor and they want or require ongoing Life Insurance, they may not qualify for a new Policy or it may now be too expensive. Come To Agreement addresses the irrevocability issue in Insurance Law. The Policy can automatically waive the “Irrevocability” clause at the conclusion of the support obligations term (as per Agreement) after the support payments have concluded, providing the Policy Owner with the freedom to continue to benefit from the Insurance Policy.
Only Come To Agreement and its insurance products have these features as benefits for our clients.
Remember…
When Children Do Well, Parents Do Well
When Parents Do Well, Children Do Well
