Negotiating a divorce settlement can be stressful, especially when tension is high and your spouse insists on contesting every last detail. One thing that often is last on people’s priority list, but which should not be overlooked, is insurance.
Insurance policies are standard parts of settlement agreements. The spouse who pays alimony or child support is commonly expected to maintain a life insurance policy that would cover the debt owed to the spouse or children on the receiving end of the money, in case the payer dies while a debt is owed.
If you’re the spouse who is the beneficiary, you must be certain that the policy amount is sufficient to cover your children’s educations, your mortgage and related debt. It’s important to consider sticking in guarantees that forbid a lapse, cancellation or change of beneficiaries to the life insurance policy.