Life Insurance in a SA

[SomeGuy]

Greetings,

As part of the final SA, STBX wants a big honkin' life insurance policy, with her as the beneficary, which (if she gets what she is asking) will run me $350/month.

I'm assuming she's asking for the moon here....

Is this even a valid request?? and is this over and above CS, SS & the laundry list of S7 she is presenting me with ??

If so... can anyone point me to some guidelines on how the amount should be fairly calculated?

[blinkandimgone]

The amount should be calculated in such a way that your obligations for CS and SS would be covered for as long as they would be paid, in the case of something happening to you.

For example, if your CC & SS obligations are $1500/month for the next 10 years (if your youngest child is 10 years away from the end of CS - graduated post-secondary), that is the amount of insurance you should have.

10 years * 18K/yr = 180K life insurance

Typically it's worded as 'irrevocable life insurance policy' with the beneficiaries listed as the children and other parent.

[DunnMom]

It's pretty standard I believe.

I am the custodial parent and when I separated the kids' were only 3 & 5 yrs old (they are now 14 & 16).

My ex was req'd via court order to take out a $250,000 life insurance policy with me as beneficiary until the kids' are no longer children of the marriage. Then he is free to dissolve the policy, cash it out or change the beneficiary. As I understood it, it was to ensure if something happened to him (the CS Payor) that the kids' would still have CS coming in. (I believe the figure was derived from taking his monthly CS payment x 12 and then x how many years he'd be paying support for)

(Although usually BOTH parents are req'd to take out a policy. In my case, he or his lawyer never pushed for me to obtain one)

[SomeGuy]

Thanks both of you...

Given my age and years of marriage, I am potentially looking at 40 years of SS (on a 15 year marriage ) CS has 5-6 years to go... If I do that math, the insurance premiums alone will be brutal.

Are they really "over and above" all the other obligations?? or is there any provision to roll that into the SS payments??

[blinkandimgone]

Thanks both of you...

Given my age and years of marriage, I am potentially looking at 40 years of SS (on a 15 year marriage ) CS has 5-6 years to go... If I do that math, the insurance premiums alone will be brutal.

Are they really "over and above" all the other obligations?? or is there any provision to roll that into the SS payments??

I've never heard of it being rolled into the SS payments.

I do know there have been many cases where a CS/SS paying spouse has cancelled the insurance, providing nothing for the family upon death - but the payee has a valid claim on the estate - often causes tremendous rifts in familes, especially if there is a new wife or family afterwards.

Hopefully someone else with more knowledge will come along and offer better advice for you

[Atlas]

My lawyer told me that the court can not make you get life insurance.

If you choose to you can input it into the Divorcemate program wich will give you a reduced SS amount. This is a benefit to your ex that they would have to pay for proportionate to income as in S.7 expense cost sharing.

Atlas

[blinkandimgone]

Your lawyer was wrong or telling you what you wanted to hear. It is not uncommon for this to be included in an SA and proof of the valid policies to be provided on an annual basis.

Family Law Act, R.S.O. 1990, c. F.3

Powers of court
34. (1) In an application under section 33, the court may make an interim or final order,

(a) requiring that an amount be paid periodically, whether annually or otherwise and whether for an indefinite or limited period, or until the happening of a specified event;
(b) requiring that a lump sum be paid or held in trust;
(c) requiring that property be transferred to or in trust for or vested in the dependant, whether absolutely, for life or for a term of years;
(d) respecting any matter authorized to be ordered under clause 24 (1) (a), (b), (c), (d) or (e) (matrimonial home);
(e) requiring that some or all of the money payable under the order be paid into court or to another appropriate person or agency for the dependant’s benefit;
(f) requiring that support be paid in respect of any period before the date of the order;
(g) requiring payment to an agency referred to in subsection 33 (3) of an amount in reimbursement for a benefit or assistance referred to in that subsection, including a benefit or assistance provided before the date of the order;
(h) requiring payment of expenses in respect of a child’s prenatal care and birth;
(i) requiring that a spouse who has a policy of life insurance as defined under the Insurance Act designate the other spouse or a child as the beneficiary irrevocably;
(j) requiring that a spouse who has an interest in a pension plan or other benefit plan designate the other spouse or a child as beneficiary under the plan and not change that designation; and
(k) requiring the securing of payment under the order, by a charge on property or otherwise. R.S.O. 1990, c. F.3, s. 34 (1); 1999, c. 6, s. 25 (11); 2004, c. 31, Sched. 38, s. 2 (3); 2005, c. 5, s. 27 (15); 2009, c. 11, s. 31.

[Atlas]

I understand that it is not uncommon to have this in an SA. However, SA's have all kinds of things in them not required by law.

The act states "spouse whos HAS a policy". The wording is extremely clear and precise.

You can not be forced to get a policy if you don't already have one. Check with your lawyer.

The act does require you to keep the policy and not cancel it or change beneficiaries IF you already have it.

Atlas

[blinkandimgone]

I did, she says hell yes.

[Atlas]

Your lawyer is wrong or telling you what you want to hear.

Maybe we should pay our lawyers a few thousand bucks to argue it out? lol

All I can say is that I have been through this and I did not have to get a policy.

Also, it is very important to note that IF you do have a policy, your ex has to pay for their portion of it. DivorceMate conveniently has a place to input your numbers.


Atlas

[dinkyface]

Given my age and years of marriage, I am potentially looking at 40 years of SS (on a 15 year marriage )

Seems very unlikely ... remember that "indefinite" does NOT mean "unending" ... more likely ending when you retire and you both start living off your split rrsps/pensions.

[DunnMom]

My lawyer told me that the court can not make you get life insurance.

If you choose to you can input it into the Divorcemate program wich will give you a reduced SS amount. This is a benefit to your ex that they would have to pay for proportionate to income as in S.7 expense cost sharing.

Atlas

Wrong ... My ex was court ordered to provide a life insurance policy with me as sole beneficiary until BOTH children were deemed not "children of the marriage"

This was over and above CS & Section 7

I'm in Ontario

[Atlas]

Was that court order part of your SA?

Your ex could have successfully appealed. You got lucky.

Are you paying your portion of the policy?

If you are not, you got very lucky.

Atlas

[SomeGuy]

Thanks everyone for this interesting discussion...

This is just one more (potentially significant) thing to consider in this morass.

I'm the honest one... just trying to get through this.

[billm]

Note that for CS, your ex should have life insurance as well.

Also for SS, if support is 'forever', and you need to have a policy, then she should also have a policy to cover SS to you in the event of her death in the case where you require her support. If you have an obligation to pay support based on need due to having had a long term marriage, then it seem obviously fair to me that she should have to support you if for some reason you need support, and it follows that she should have life insurance to cover that.

Regarding SS and life insurance - I have a time limited very specific SS agreement. My SA states that upon death of either, the SS obligation ceases.

I think that for SS purposes, the receiver should have to buy the policy on you.

CS is a different matter. One has an obligation to support their children, even after death, via life insurance or other means such as estate. If your estate would cover your support obligations, and your will states that is what it should be used for, that should satisfy your obligations and life insurance should not be necessary.

My self written SA states (the 'double' part is intended to cover post secondary for the most part):

The Husband and Wife shall each maintain life insurance in the amount equal or greater than double the highest historic value of that parents child support amount for the remaining number of children, for the remaining number of years until the youngest child of the marriage reaches 18.

The other parent shall be the beneficiary with the secondary beneficiary the remaining children of the marriage.

Proof of the policy, the insurance provider, account number, beneficiary, and amount will be provided to the other parent once per year while the insurance is required.

For example, if there are two children of the marriage and the highest child support table amount since Sept 1, 2008 of the Husband considering two children was $1000 per month and the youngest child of the marriage is 9, the Husband's life insurance policy shall be at least $1000/month x 12 months x 8 years x 2 double = $192000. Payment to the Husband or Wife by the others’s insurer of the amount hereby required will discharge the payor's estate from any obligation to pay child support.