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New insurance product protects divorce decrees

California is home to some of the largest divorce settlements in the country. Family law lawyers spend hours of excruciating time and energy to get a settlement for their clients that works in their best interest. However, an unexpected death or disability can disrupt all of this hard work and attention to detail.

It is not uncommon in a mediated divorce for the parties to agree for the recipient of spousal support to have a life insurance policy on the paying spouse. With this simple policy, a recipient spouse knows that his or her financial needs will still be taken care of if the paying spouse dies unexpectedly. However, in many cases involving disability, there has not been a means that would substantially provide for fulfillment of terms in the divorce decree. Even with private disability insurance policies, the most that an insured can expect to receive is about 60 percent of his or her income. Therefore, the only remedy has been for the paying spouse to petition the court for an adjustment of his or her obligations based on a material change of finances. However, this solution often does not work for either spouse. The paying spouse may incur additional expensive legal bills while simultaneously facing a major medical catastrophe. The recipient spouse may now lack the funds that he or she needed to maintain his or her post-divorce lifestyle.

Now, insurance companies are offering an option that may be added to a collaborative divorce: divorce insurance. This product helps to sustain the obligations that the parties agreed to under a divorce decree so that the recipient spouse still receives the funds due to him or her, even if the paying spouse becomes disabled.

Individuals who are worried about how disability may affect their divorce agreement may choose to consult a family law lawyer. He or she may be able to discuss ways to safeguard the agreement, such as through using insurance.

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