A very commonly asked question is “can I purchase life insurance on my children’s father?” Like many financial questions, the true answer is maybe. It depends on whether there is an insurable interest. If an insurable interest exists the best avenue for purchasing and funding a policy will vary depending upon your circumstances.
The best way to answer this question is to start with a definition of insurable interest and apply that definition to the three common scenarios for purchasing life insurance on children’s father(s).
- When married – Engendered by love and affection
- When divorced – Protecting alimony payments
- When never married – Protecting child support payments
Purchasing Life Insurance for All Fathers
The definition of insurable interest is the foundation for answering any question about life insurance on children’s father. A person who has an economic benefit attached with continued life and good health of another individual has an insurable interest. People with insurable interests could be related by blood or marriage, business, and creditors.
For the purpose of this article, we will focus on blood and marriage relationships. Online life insurance quotes can help determine the level of monthly premium that can be afforded, regardless of family circumstance.
Most people will have an insurable interest in their spouses and dependents. In most states, the rules will follow this general breakdown.
|Insurable Interest||No Insurable Interest|
|Parents and children||Nieces and nephews|
|Grandparents and grandchildren||Cousins|
|Brothers and sisters||Aunts and uncles|
The most straightforward way to purchase life insurance on a child’s father is when mom and dad are both married. The insurable interest is clear. In addition to the economic interest, there is a love and affection interest.
Men are the primary breadwinners in many families, and purchasing life insurance on the father’s life is a long-standing tradition. The best time to buy a policy is when dad is healthy, and/or as the family grows and reaches important milestones or life events.
Life Insurance on Children’s Father during Divorce
During and after a divorce both parents may be far less cooperative, but the need for coverage may be far greater. Expenses are much higher when parents live in two homes rather than one, making it harder to save money. In the many divorce cases, the father is required to pay both alimony and child support, while also providing for his own food and shelter.
Life insurance on the children’s father is needed to secure both the alimony and child support payments in the event of his death. The most common method of securing a policy is through the couple’s property and settlement agreement. A good agreement will specify the coverage features, beneficiaries, and verification.
The property settlement agreement should specify the policy death benefit amount, the type of life insurance policy, what the policy is intended to secure, and who make the premium payments. For example, it is common for alimony to expire before child support obligations. An agreement may require two policies: one to secure alimony, and one to secure child support payments.
Children can be named as beneficiaries, but that may not always make the most sense. In the case of divorced parents, it is common practice to name the mother as trustee for the children. If any children have special needs, the funds should be directed to a special needs trust to protect their access to government benefits.
Verifying that the policy was purchased and paid becomes critical over time. The children grow older and divorced parents grow apart. What good is having a life insurance policy on your child’s father if the policy lapses? This question arises when the agreement calls for the father to pay the premiums.
A good settlement agreement will provide a mechanism for the mother to verify that the policy has been maintained. Proof of annual premium payment helps provide this peace of mind.
Life Insurance on Child’s Father when Never Married
Many children are born out of wedlock. When the parents choose to remain unmarried, the family courts may require the father to provide child support. Child support qualifies as an insurable interest. The child and the mother have an economic interest in the continued health and well-being of the father making child support payments. The policy can be purchased and funded by either parent.
Funded by Mother
In cases where the mother is the parent of primary custody, the mother often has the greatest interest in purchasing and maintaining a life insurance policy on the child’s father. If he passes away the child support payments stop. A mother can purchase and fund the premium costs herself. She will need the father’s cooperation in completing the policy application: answering medical questions and submitting any medical samples.
Funded by Father
There are two ways of getting dad to purchase and maintain a policy on behalf of his children: connection, and force of law. Involved fathers have a vested interest in the well-being of their children. A father will a strong emotional connection with his children is more likely to purchase and fund a policy out of love. This scenario is obviously preferred.
Force of law is always an option, and family courts will understand the need to secure child support payments. The need for life insurance on a child’s father is clear.
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