Divorce is undoubtedly a time of upheaval for Virginia couples. They must adapt to a radically changed future in their everyday life financially, logistically and emotionally. While there are key aspects to any family law case, including child custody, child support, spousal support, parenting time and property division, people need to understand how certain documents that were created during the marriage will be addressed. One is a life insurance policy.
Does a life insurance policy need to be maintained after a divorce?
According to state law, when there is a divorce with spousal support, the court might order the paying party—the obligor—to maintain a life insurance policy that names the receiving party. This might happen if there were a life insurance policy in place during the marriage, one was purchased by an employer or the insured person controls it with the spouse as the beneficiary.
If one of these factors is in place, it might need to be maintained while spousal support is being paid. The person who is making the payments and has the life insurance policy must have the right to name a beneficiary and designated the spouse as the beneficiary while they were married.
As part of its determination, the court will look at the person who is taking out the policy and their health, age and insurability. It will also consider the age and health of the spouse who would receive the proceeds of the policy. Other factors the court considers will be the policy’s cost; the amount of spousal support and its duration; the insurance rates when the order is made; the financial situation and ability to pay of either party to pay for the policy’s cost and other factors the court deems critical to achieve a fair outcome.
Complex family law issues can be addressed with professional help
In a divorce, one of the major worries people express is how they will be shielded financially. Spousal support is part of that. If there was a life insurance policy that the paying party had during the marriage, it is possible that the court will order it to be maintained even after the divorce. This can be a worrisome issue, not just for the beneficiary but also for the policyholder. For help with this aspect of divorce, it is important to have experienced representation.