Life insurance is needed to secure payments of alimony, child support, and even payouts of equitable distribution following a divorce. The need for it is clear, along with the need for cash flow to pay the premiums. But, questions about the amount and types of coverage should be a common part of a client’s meeting with his or her divorce attorney.
It is also good practice for a client to tell his or her divorce attorney about the beneficiaries and not just because such information is required to be disclosed in New Jersey. It is a precarious situation for a person to own life insurance with the wrong or unintended beneficiary. In that case, the life insurance company will pay out the policy to the person listed as the beneficiary, even if that person is different from the person whom a judge or a divorce agreement said should be the beneficiary.
So, a client needs to have a discussion with his or her divorce attorney about obtaining, maintaining, and ensuring proper life insurance coverage for alimony, child support, and payouts of equitable distribution.