In Massachusetts, many people think that a divorce is largely settled once the two parties agree on major issues such as property division and custody. However, there are many more details that are left to be decided that can present challenges when trying to finalize a divorce agreement. One of these areas is life insurance.
The biggest question that arises is how much coverage is necessary. The parties cannot simply pick a random number because that figure can have real consequences if the insurance payout is ever needed in the future. At the same time, it could also be unfair to require too much life insurance because one or both of the spouses will need to write a check to pay the premiums. The amount of coverage requires an educated estimate of the possible costs for raising children in the future.
While one party may want to be conservative and require a large policy, it can also be burdensome on the other spouse. Coverage also gets more expensive as the insured gets older as policy premiums increase with age. The parties should also consider what happens if one of the spouses becomes more difficult to insure because they have developed a health condition that can cause them to be turned down for a policy. These are issues that people may not consider on their own.
A divorce attorney may help keep their client focused on all of the details so that the divorce agreement can be as comprehensive as possible when it is signed. If problems arise years after the divorce or if the life insurance policy is needed, it might be too late to fix any issues. However, minor and major details are often overlooked when a couple is in the middle of a divorce because they are distracted.