You are required as part of a divorce to provide a sufficient amount of Life Insurance to cover alimony, and child support obligations. If you are paying child support you need to provide enough life insurance to support your children in the event of your death. If you are receiving child support, you must provide enough life insurance to pay for the services you render and amount you use from your earnings to support the children. The younger the children are, the more life insurance the court will require you to purchase.
If you are paying alimony, the life insurance will pay a lump sum to your spouse because the alimony will cease upon your death. The amount of life insurance that will be required will be based on the amount of alimony and the duration of alimony (how long it is paid for and when it terminates).
Ann O'Flanagan is an attorney who handles family law exclusively in Flanders, New Jersey.
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Certified Divorce Financial Analyst
Business Valuators / CPAs