When Colorado couples are going through a divorce and one person will paying child or spousal support to the other, they might also want to consider life insurance. This can help ensure that the person receiving support can continue to get it even if the payer dies unexpectedly.
The amount of life insurance purchased should be roughly the total amount that will be paid in child or spousal support. Parents may also need to take a child’s college education into account. This may include more than just the cost of tuition since the child will continue to have the usual regular expenses on top of college costs.
However, there could be some obstacles to obtaining the necessary life insurance. For example, a parent who has term life insurance may be paying affordable premiums. However, if the term ends before that person’s financial obligations do, new premiums may be much higher. The divorce settlement might include a cap on premiums. Another potential issue that may arise is that a person may be uninsurable due to poor health or other issues. If this is the case, the person may need to find another method to ensure that an ex-spouse and children are taken care of. This might be making them beneficiaries on a retirement account, purchasing an annuity or leaving them other property.
Negotiating these issues along with child custody and property division in a divorce can be difficult, but it is important for people to try to make decisions that are in the best interests of their children and that help them achieve financial stability. Couples may have a better outcome if they negotiate an agreement with the help of their respective attorneys and try to find a mutually beneficial outcome instead of going into a more adversarial process of litigation.