In many divorces, one spouse is ordered to make monthly payments for “alimony” or “maintenance” to the other spouse to help that spouse support him/herself. Usually, the spouse receiving the payments is entitled to keep receiving them unless he or she remarries or starts “cohabiting” or living with someone else as a partner.
But what if the spouse who’s paying the support passes away sooner than expected, leaving the other spouse without any means of support?
In some states, a judge can order one spouse to purchase and maintain a life insurance policy for the benefit of the other spouse to protect against that. This means the spouse pays an insurance company a certain amount of money each month (a “premium”) in exchange for the insurance company’s promise to pay the ex a certain sum (a “death benefit”) if he or she dies.
In many states, this is a pretty new development. For example, Virginia just passed a law giving divorce courts the power to order a support-paying spouse to keep a life insurance policy for the benefit of the recipient spouse. Previously, Virginia only allowed courts to order that such a policy be maintained if it was being used to support their children. Still, the new law has its limits. For example, it doesn’t allow a judge to order a paying spouse to go out and buy a brand-new policy for his or her soon-to-be ex. The court can only order that an existing policy continue after the divorce, preventing the paying spouse from changing the beneficiary.
Other states have similar laws. In Minnesota, a court apparently has the power to order that a life insurance policy actually be purchased in certain circumstances. There’s no specific statute in place that states this, but courts have ordered spouses to do this without higher courts overturning the orders on appeal.
Regardless of where you live, however, you shouldn’t expect a judge to order your ex to purchase or maintain a life insurance policy for your benefit at the drop of a hat. If it’s allowed, the judge will take into account things like how old or healthy the paying spouse is. That’s because insurance companies don’t like to insure older, sicker people given the high likelihood they’ll be paying a big death benefit before collecting much in premium payments.
Courts will also consider the age and health of the spouse who supposedly needs support. If that person is fairly young and healthy, a court is less likely to enter such an order because that spouse is probably capable of working and contributing to his or her own support. If a judge is considering ordering a life insurance policy as backup for alimony payments, the judge will probably take into account the number of years for which alimony has been ordered. It wouldn’t be fair to make someone purchase a policy for a longer term than the alimony term. Like anything else, it all comes down to fairness.
It’s also worth mentioning that if you live in a state that does not allow a court to require someone to buy a new policy or maintain an existing policy for the ex’s benefit, you might want to check your existing life insurance policies and, if you have someone else in mind who you’d rather receive the proceeds if you pass away, change your beneficiary designations. But it’s also a good idea to first talk to a family attorney to find out more about the laws where you live, since these are such complex issues.