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Guaranteeing Spousal Support

Guaranteeing Spousal Support

July 29, 2020

Let us assume you just completed your divorce agreement and are pleased with the alimony and child support received. The ex-spouse has a good paying job, so you are not worried about the ability to make the payments. Have you considered what would happened if that person were to die or become disabled and therefore no longer able to make those payments?


For this reason, we would recommend securing spousal support through life insurance and disability insurance as part of the divorce agreement. A best practice would be to have the policy owned by the payee or be the irrevocable beneficiary. The ex-spouse can be the premium payor, but by being the owner you can verify that the policy stays in place. If the alimony is for a specific number of years, you can line up a term insurance policy to meet the need. Alternately, if the benefit is a lifetime payment, a minimum funded guaranteed universal life policy could be utilized.


For disability income protection, a policy protecting up to age 67 is probably as high as can be purchased. The payer should have disability income anyways to cover expenses and alimony or child support would just be one of those expenses.


If the Ex-spouse is not able to obtain insurance but can afford a lump sum payment, they could purchase an annuity with an insurance company. A lump sum would be determined that would result in the agreed upon payment. In this approach, the payor also does not have to worry about making the payments as it is handled automatically by the insurance company.