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Life insurance and divorce

| Mar 16, 2020 | Divorce |

The end of a marriage can be stressful for many estranged Illinois couples. Some of the issues that they have to confront when they are attempting to negotiate a comprehensive settlement agreement include alimony and child support, but they often fail to take into account one important factor, and that is procuring a life insurance policy on the party that will be required to make those payments.

In the case of alimony, the parties can agree on how much it will be per month and how long it will last. It would be prudent for the recipient to determine the present value of those payments and then to have a provision in the settlement agreement that requires the payer to have a life insurance policy in that amount. Of course, the payer would want to have the opportunity to have the insurance amount decrease over time as the remaining amounts owed are less.

Child support obligations deserve a similar look as well. Many estranged couples agree that the support obligation should extend through the child’s college education, and thus the cost of tuition as well as room and board should be factored into the equation for life insurance policy purposes. Other amounts, such as incidentals and clothing, might need to be covered as well so that the surviving parent is not confronted with an undue burden in the event of the death of the payer.

Additional divorce legal issues that are traditionally addressed in a settlement agreement include parenting time and property division. Many couples try to reach an accord in this matter with the assistance of their respective attorneys rather than going through costly and lengthy litigation.