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  • Life Insurance

    I am just seeking some advice or opinions about life insurance. Thursday we are meeting with a friend who sells life insurance. While we trust him immensely, I am looking to hear what others think an appropriate amount of life insurance would be? Bf had a policy when he was with the ex...when they split she had her lawyer request he sign it over, as she didn't think he could make the payments... he did as requested (stupid if you ask me) and then a month later she cancelled the insurance.

    So now we are looking at purchasing life insurance due to buying a house and we are now more financially sound to do so.

    The obvious- he is looking to cover his CS obligations and any post secondary expenses... but what else should he be prepared for when it comes to the child? Should the ex be the beneficiary? Or should he appoint someone else?

    Thanks in advance!

  • #2
    IMO, it depends on the children's ages. Ideally, your insurance payout, should something happen to you, should cover at least your wages for the amount of years left that CS would be required plus post-secondary expenses.

    I have made my children the beneficiary, in trust of one of my parents, and my cousin as a backup should my parents not be around.

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    • #3
      Originally posted by Berner_Faith View Post
      I am just seeking some advice or opinions about life insurance. Thursday we are meeting with a friend who sells life insurance. While we trust him immensely, I am looking to hear what others think an appropriate amount of life insurance would be? Bf had a policy when he was with the ex...when they split she had her lawyer request he sign it over, as she didn't think he could make the payments... he did as requested (stupid if you ask me) and then a month later she cancelled the insurance.

      So now we are looking at purchasing life insurance due to buying a house and we are now more financially sound to do so.

      The obvious- he is looking to cover his CS obligations and any post secondary expenses... but what else should he be prepared for when it comes to the child? Should the ex be the beneficiary? Or should he appoint someone else?

      Thanks in advance!
      Your life insurance agent should have a program to calculate that amount for you. They enter information such as mortgage, post secondary education, spouses income, etc and spit out a number that should cover everything. The number should give you a pretty good guideline to go by and you can add/remove variables if, for example, you already have mortgage insurance.

      The beneficiary should be the children. The ex would be trustee since the children are under 18. Or if he really hates his ex, the trustee could be anyone.
      Last edited by HappyMomma; 10-23-2012, 09:41 AM.

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      • #4
        If you have a life insurance policy, you may be ordered by the courts to make the other parent the beneficiary for the benefit of the children.

        If you do not have a life insurance policy you cannot be ordered to obtain one.

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        • #5
          Originally posted by OrleansLawyer View Post
          If you have a life insurance policy, you may be ordered by the courts to make the other parent the beneficiary for the benefit of the children.

          If you do not have a life insurance policy you cannot be ordered to obtain one.
          Here is a twist that I haven't seen applied in matters yet:

          Material change in circumstance: New spouse and new child with new spouse.

          Would a court order that the existing life insurance policy be put into ex-spouse's name in whole or would the policy be split between the children equally.

          Furthermore, why is it that these are not ordered to be put into trust for the children of the parent rather than in the "other parent's" name and control. One would think that the court would order a life insurance payment to be held in trust for the benefit of the children of the unfortunately, dead parent, as the money is the "right of the child".

          Usually the pay-out from a life insurance policy is not a normal amount. It could be well over 500,000. The trust could be ordered to pay child support in accordance with the last order of the court on index to cost of living until such time that the children who are benefit to the insurance payout would no longer be considered a "child of the marriage". Same could be done with S.7 expenses possibly?

          Just throwing darts. The whole "life insurance" matter is creepy to me as a whole in family law matters.

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          • #6
            I remember, back when I was going through court / lawyer stuff, my lawyer asked if I had life insurance. I confirmed I did. He asked if I had the other "parent" listed as beneficiary, and I told him no...He thought I should have her listed. But...

            I have "in trust for" designations, to handle both of my kids (kind of, and kind of not, the same situation Taken mentioned - different moms). The point is... it's my life insurance, and I want to make sure that my beneficiaries really are my children...listing my ex (at least in my particular case), does not guarantee that.

            It was not something ever put into an order though, for me.

            Hopefully, it's a moot point, for the next many years. :-)

            Comment


            • #7
              Originally posted by dad2bandm View Post
              Hopefully, it's a moot point, for the next many years. :-)
              I agree. I hope that you live to a ripe old age in which your children are no longer "children of the marriage" and this matter never has to be dealt with. Litigating someone for "life insurance" is like planning for their death in my honest opinion. It is the one area of family law that gives me the creepies.

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              • #8
                I should have mentioned, that the ex has no idea we are purchasing life insurance and she has not once mentioned or asked about being listed as a beneficiary.

                His children are only 4 and 7... at minimum, another 14 years we must prepare for the worst. Currently, any of his assets/accounts have myself as the beneficiary and the children, shall I not be around. Same with my assets/accounts... he is the beneficiary and I have his children listed as second, with my sister in trust.

                We are going to ask the insurance provider his opinion, we are just hoping this will be an easy process.

                One question...is she requests to be the beneficiary for his life insurance, should she have to provide a life insurance policy with him as a beneficiary, in the event something happens to her?

                I agree Tayken... this is something that should be left out of court. We have been lucky and nothing as gone through court, for the most part both of them are civil with each other.

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                • #9
                  I'm not sure why Tayken feels talk of life insurance is creepy. It was something that my ex and I talked about long before divorce, planned for, and put in place. Our household would have been financially upset by the death of ether one of us, and we planned for life insurance that covered our financial expenses/obligations of raising a child without one of us being there/our incomes.

                  Berner, our separation agreement calls for him to maintain that existing policy on his life. After our divorce (and unasked for), I purchased my own policy, that would ensure dd had financial support. I have dedicated $250,000 towards dd's support should I die, and I put that policy in place about 10 years ago. Actually, I have a higher amount for total coverage, but I've chosen in my policy to dedicate $250,000 to dd's advancement in life and the balance to my current husband.

                  The beneficiary is not my ex - it is the current estate trustee of my will, as trustee, to be held in trust and paid for as support and for the benefit of dd.

                  If she asks for life insurance particulars, and a dedicated beneficiary, I would most certainly ask for an identical policy.

                  By the way, should mention, have never asked the ex for proof that he has that policy still in place after 16 years. Highly doubt it is. Also have never told my ex that he wins $250,000 if I die first. Don't want to be out on a dark night in a narrow alley with that incentive out there.
                  Start a discussion, not a fire. Post with kindness.

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                  • #10
                    Originally posted by mcdreamy View Post
                    I'm not sure why Tayken feels talk of life insurance is creepy. It was something that my ex and I talked about long before divorce, planned for, and put in place. Our household would have been financially upset by the death of ether one of us, and we planned for life insurance that covered our financial expenses/obligations of raising a child without one of us being there/our incomes.
                    That is all fine... I subscribe to the Beatles concept of "Ob-La-Di, Ob-La-Da" and particularly question those who plan for "death".

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                    • #11
                      A good thing to include in any agreement is a life insurance policy. Most should have 3 policies;

                      1. child of the marraige,
                      2. new house/mortgage,
                      3. new child from new relationship.

                      Beneficiary is the child, trustee is your power of atterny in your will. They provide the $$ to the ex after your death as they see fit. eg: CS, schooling, extra-ordinary or extra-curricular expenses. Remaining money goes to the child upon turing a certain age (eg 18, 21, etc).

                      Comment


                      • #12
                        Originally posted by blinkandimgone View Post
                        IMO, it depends on the children's ages. Ideally, your insurance payout, should something happen to you, should cover at least your wages for the amount of years left that CS would be required plus post-secondary expenses.
                        Ideally, doesn't sound reasonable. If you have a young child (say toddler), then insurance to cover what you mentioned would cost a small fortune.

                        Comment


                        • #13
                          Originally posted by Teenwolf View Post
                          Ideally, doesn't sound reasonable. If you have a young child (say toddler), then insurance to cover what you mentioned would cost a small fortune.
                          I think it depends on what your income is. For example, my bf will have CS payments for around the next 14 years (when his youngest turns 18), his life insurance would have to cover around $90,000 to cover the next 14 years (this number is based on his current CS payments)... however if someone is making $100K, for the next 14 years, insurance would have to be around $235K just to cover CS.

                          Either way, he purchased insurance, that more than covers his CS obligations. We plan to review the insurance once a year and every 5 years we have the ability to redo the insurance completely if we wish.

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                          • #14
                            Keep in mind that the insurance amount is not child support amount x months of child support.

                            $50,000 today is worth more than $500 per month in child support over the next 100 months.

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