Step-Down Insurance Provisions – Marriage Is About Love Divorce Is About Money® Podcast

Protecting Financial Support in Divorce: Life and Disability Insurance Essentials (Ep. 9)

By TheBusinessofDivorce | November 8, 2024

Divorce is tough enough—don’t let unexpected surprises make it even harder.

Without the right insurance in place, child and spousal support could disappear when you need it most.

Gabrielle Clemens, JD, LLM, Certified Divorce Financial Analyst, and Accredited Estate Planner, gets real about why life and disability insurance aren’t just “nice-to-haves” but absolute musts in your divorce plan. She breaks down how to make sure support payments are protected, even if the payor becomes disabled or worse. From tips on who should actually own the policy to how to keep coverage up-to-date, she’s got you covered.

Whether you’re in the middle of a divorce or just thinking ahead, tune in and get the insights you need. Don’t leave your future to chance—find out how to plan ahead.

Key Insights:

Life Insurance and Divorce: Early planning is key. Gabrielle explains why having a life insurance policy in place before finalizing the divorce could ensure child and spousal support obligations are met, even if the payor passes away
Disability Insurance Essentials: Learn how adding disability coverage to your divorce agreement could protect support payments if the payor becomes unable to work
Ownership and Control: For added security, Gabrielle advises that the support recipient should own the life insurance policy, allowing control over policy terms and reducing risks such as changing beneficiaries or coverage lapses
Beneficiary Updates: Stay vigilant with beneficiary designations and ensure policies remain active. Gabrielle offers tips for avoiding potential issues like policy loans or benefit reductions
Adapting Long-Term Coverage: Implement step-down provisions for coverage reduction over time or obtain private insurance policies to protect against employment changes
Forward-Thinking Agreements: Anticipate future life events in your divorce agreement to avoid costly legal disputes later. Gabrielle discusses alternatives such as using retirement account beneficiaries if insurance isn’t an option
Proactive Tips for Smooth Transitions: Start planning policies early, check all the details, and work towards a cooperative post-divorce relationship to help reduce conflicts
And much more!