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The obligation on a payor to provide spousal or child support to his or her dependents is one that the law takes very seriously. Whether in a separation agreement or as ordered by the court, the maintenance of a life insurance policy is a necessary security measure to ensure that the payor’s dependents, to whom spousal and child support is owed, are not left financially destitute in the event of the payor’s untimely death.
In fact, courts are given broad authority under family law statutes to not only order that a payor maintain his or her life insurance with the recipient as beneficiary, but also to direct a payor to obtain such insurance if he or she does not already have it, to secure the recipient’s source of support. This is a critical point. Not only are payors responsible for providing monthly support, but they will also have the added expense of monthly life insurance premiums, which can become quite expensive depending on the type of insurance policy obtained.
One way to keep these premiums minimal is to negotiate purchasing a fixed term policy that spans for just the duration child support or spousal support is owed.
Another way is consulting with your lawyer to determine what the appropriate face value amount should be, and trying to negotiate and agree upon a figure that is sufficient to cover that amount.
A third way is to review the face value amount of the life insurance policy after a period of in order to reduce the amount based on the number of years remaining that support is owed, thereby reducing the monthly or yearly premiums.
For more information on support and life insurance, please visit our website. If you would like advice on your own family law matter, you can schedule a consultation by calling (905) 581-7222. Thanks for watching.