Many married couples get life insurance for both spouses. We have finally realized the value of a stay at home parent and the need for insurance for both parents in a marriage. But, what about life insurance when you are getting divorced?

Many judges require the non-custodial parent to obtain life insurance that will go to their ex for the care of the children in the event of death. However, few require the custodial parent to have any. It is very important to consider the importance of life insurance for both parents. It is just as important now as it was before the divorce.

If the custodial parent passes away, the children will have moving expenses in addition to the normal every day expenses. Also while there will be no child support to pay there will not be any to collect, either. Many non-custodial parents believe that they pay far more support to the custodial parent than it costs to raise the child but the truth is, child support typically doesn’t begin to cover the basics, much less anything else.

Many custodial parents were former stay at home moms who do not have enough social security credits to qualify their family to collect much money, if any, in the event of their death. Often if the custodial parent remarries, they become stay at home parents again, further reducing the collection potential.

When insuring the custodial parent consider all the costs of raising the children including child care, taxi service and all the things that most custodial parents must do for their children on a daily basis.

If you are the non-custodial parent, do you have room for the children to live with you comfortably? Will you need to move to another area with a better school district? Is your current job conducive to single parenthood? Consider all factors, as if you are going to raise the children. Put yourself in that position. What will you need? Consider college costs; consider that you may earn fewer promotions on the job. Most importantly, be realistic.

When insuring the non-custodial parent also consider all the costs of raising the children, remembering that you might be able to collect social security on behalf of the child. You can look at the yearly social security statements to determine eligibility for either parent. Factor in the amount you receive for child support, alimony, and what you expect to receive in the future for college expenses. In both cases, consider who is carrying health insurance, as this may become a factor.

Keep in mind real needs. If your children are normal teenagers you do not need half a million dollars unless you have five or six children. Keep in mind the legal limits of insurance. If the covered person’s earnings are low then the amount of insurance they are qualified for will be a factor. It would be unfair to use up this entire amount in the event that the parent has more children with another partner. Consider whether this is a factor and be fair.

Figure out how much money you would really need if your ex spouse passed away, and only get that amount in a term policy. For instance if the child is 13, a ten year term policy would be sufficient because the child will be done with college by the time he is 23 years old. The divorce papers should specify who would get what portion of the insurance. As the children age, more and more should go directly to the children rather than to the ex-spouse on behalf of the children. If possible, some of the money should go to funeral expenses. This will be an important even in your child’s life and seeing their parent buried in a pine box in an unnamed lot someplace would be traumatic.

There are many ways that you can assure that you have insurance on your ex-spouse. The best way to do this is to obtain the policy prior to the divorce being final and make sure that you are the owner of the policy. If you are the owner, you are responsible for paying for it, as well as the one with access to choose who the beneficiaries are. You would own the policy for your ex and your ex would own the policy for you.

Your spouse will have to get a medical exam and agree to allow you to be the owner of the insurance policy, and vice versa. This is the best way to prevent changes later. Many times when someone remarries, the new spouse becomes offended that the insurance benefits the ex-spouse but if the ex-spouse owns the insurance policy, nothing can be changed and there is no reason to feel resentful because they do not have to pay for it either.

I would not allow someone to own a policy on me if he is abusive. We are assuming mentally stable, loving, caring parents who could not get along but want the best for their children.

The other alternative is to own your own policies and control the beneficiaries on them, but require a yearly accounting to make sure the policy is correct and according to the divorce papers.

Peace of mind is an important thing to have. Getting your insurance needs taken care of will go a long way in this direction.

If you have any questions or comments regarding this article, please go to the forums and post. Your input is valuable to me.