When couples separate and have children, support payments are typically required. 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 parent to the other parent. Sometimes as children reach university or college, a parent pays some of the child’s expenses directly to that child or directly to the university or college. Family and legal agreements may 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 method to secure all support commitments.
Family Law frequently considers challenging situations, which are common. Children switch primary residences. Some children may have long term health needs. Parents may become sick and cannot work. Sadly, some moms and dads pass away. Whatever challenging situation may occur, children have ongoing financial needs and usually need financial support from their two parents.
Come To Agreement offers an innovative Family Law Support Insurance program that secures support payments and financial obligations. Come To Agreement works with 7 of Canada’s largest Life Insurance companies to provide support payment security as required in Separation Agreements or as mandated by Family Court.
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 are 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 RBSI (Rebalancing Beneficiaries Support Insurance), which rebalances downwards the secured support obligation and increases proportionately the insurance coverage to other beneficiaries such as the children or a new partner or spouse, etc. This creates a win/win insurance policy for both ex-spouses. RBSI is required when there’s a date that support obligations end. Additional Family Law benefits are outlined in #4.
- As couples become older and child support obligations are low, Spousal Support obligations frequently need to be higher, based on the ages of the parties, length of marriage or cohabitation, individual incomes, etc. In long-term relationships or marriages, Spousal Support obligations can be an indefinite period. When an obligation continues for many years and the support payor’s income typically reduces as they age and retire, Life Insurance, which secures the support payments, may not always decline. Support payments could go on for life. 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 you amend your existing policy to take advantage of the benefits of our custom Separation Insurance packages including the Rebalancing Beneficiary Support Insurance (RBSI).
- There are two additional Family Law problems which Come To Agreement addresses in our insurance packages. 1) Current insurance protocols don’t permit the 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 its support beneficiaries clients informed, giving them the option to keep the policy active by taking over payments on a temporary basis until the issue is resolved. 2) In Family Law, the beneficiary of the support payments is often shown as “Irrevocable” on the policy. This has many legal disadvantages for the Support Payor who can end up up, at the conclusion of the support obligations, with a Life Insurance Policy that serves no meaningful purpose. Come To Agreement addresses this issue by keeping the irrevocability clause during the support obligations term, and automatically waives it after the support payments have concluded, providing the policy holder with the freedom to continue to benefit from the insurance policy in whichever way they see fit, for as long as they desire.
Only Come To Agreement and its insurance products have these features as benefits for its clients.
Come To Agreement has other innovative Family Law products created to help separated families move on and in healthier ways.
Try My2Families, it’s FREE. It’s a collaborative Ex-Family ecosystem, created to resolve challenging communication, parental scheduling of children and their activities, keep children’s information in one place, appropriately share children’s expenses in the Money Manager module, and much more.
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