Can you get life insurance on your child’s other parent – the father or mother that you rely on to fund child support or alimony payments?
Yes – you can buy coverage on another person provided you can show an insurable interest. However, this does not mean you can do so without their knowledge or consent.
Addressing money issues can be hard when dealing with someone you had an intimate relationship with in the past. However, the premature death of that person could put you in a financial bind.
Therefore, it makes sense to dig into the topic and purchase the right life insurance policy while you still can. Do not wait until the other parent gets sick and cannot qualify.
Life Insurance on Child’s Father or Mother
Buying life insurance on your child’s father or mother puts you in control of the beneficiary designations, and makes sure that the coverage remains in force while you need it. However, you must pay the premiums yourself in order to enjoy these privileges.
In addition, you must have an insurable interest and obtain the consent and cooperation of the other parent. Securing child support is a common reason to take this path.
You must establish what the industry calls insurable interest in order to buy life insurance on another person such as your child’s mother or father. This other parent must meet one of two possible tests.
- An economic benefit attached to continued life and good health of the other parent
- A substantial interest engendered by love and affection if closely related by blood or by law
Clearly, most parents pass both tests. However, an absent father with no financial interest or affection towards your child might fail the standard. On the other hand, blood and law relate to a deadbeat father behind on his legal obligations.
Securing Child Support
Buying life insurance on another parent to secure child support is an easy example of having an insurable interest. Clearly, this shows an economic benefit to the beneficiary. In addition, both the father and mother are related by blood to the children.
- Term life insurance is a good choice for securing child support for most parents. A term policy offers lower premiums for a specific death benefit. In addition, a thirty-year term policy provides level premiums until the child reaches the age of emancipation. This could last until age 24 if enrolled in a full-time college program.
- The permanent life insurance such as whole or universal may be a better choice to secure child support if the dependent has special needs such as a developmental disability. A child with special needs may emancipate at a much later age. This could be when the state begins to provide food and shelter.
Consent and Knowledge
You cannot buy life insurance on your child’s other parent without their consent and knowledge. This type of deal is both illegal and impractical on a number of levels. Think about the idea for a moment.
- The company does not want you to have a reason to kill him or her off
- The other parent might not want a bounty hanging over his or her head
- Most companies require the insured to answer detailed health questions
- Larger policies often require an in-person medical examination
It may be very uneasy to interact with a former lover in order to reach an agreement. However, your baby daddy will need to know about and consent to your buying a life insurance policy covering him.
Life Insurance and Divorce
Life insurance coverage for parents comes up frequently during divorce. This is an emotional time for the husband and wife. Therefore, talking about what happens to the children after the premature death of one former spouse is naturally awkward– but very important.
Always consult your family law attorney about the best way to handle existing coverage, and the need to buy a new policy to secure child support and/or alimony or fund college costs. This article does not provide legal advice.
Changing life insurance beneficiaries during divorce is best handled during the settlement process. You want the arrangement written down in a legal document for future reference. In addition, the custodial parent has the most at stake and can handle the concerns in two ways.
- Custodial parent owns the policy: an ex-wife can hold coverage on her ex-husband and name herself as a beneficiary provided she has an insurable interest (child support or alimony). This puts her in control of what happens with the policy – but comes with a cost (she pays the premiums).
- Non–custodial parent owns the policy: an ex-husband can hold coverage on himself naming the ex-wife as a beneficiary provided she has an insurable interest (child support, alimony). This saves the ex-wife money but costs her control of what happens to the policy.
- Changing beneficiaries on a policy that you own may not require notice to any former beneficiaries.
- Policy lapse notices for non-payment go to the owner and may not go to the beneficiaries
Therefore, make sure to obtain written permission from the insurance company to verify key details about the policy owned by your ex-husband or ex-wife. Check in periodically to verify that the coverage remains in force. Validate that the beneficiary designations remain as indicated in your property settlement agreement.
It makes sense to keep or buy life insurance during divorce in order to secure alimony payments on the ex-spouse on the hook for this marital support. Alimony clearly has an economic component. Therefore, alimony meets the insurable interest definition.
The length of the marriage often determines how long alimony payments last. Therefore, the length of alimony payments drives the type of coverage that makes the most sense.
- Term policies fit ex-spouses with limited duration alimony arrangements
- Permanent policies fit ex-spouses with lifetime alimony arrangements