SECURING CHILD SUPPORT WITH A LIFE INSURANCE POLICY

Unfortunately, sometimes the parent obligated to pay child support might unexpectedly pass away before their child turns 18 and graduates high school. In most states, there are laws set up so that child support obligations do not terminate upon the death of the obligor.

The court may order a child support obligor to obtain and maintain a life insurance policy, including a decreasing term life insurance policy, that will establish an insurance-funded trust or an annuity payable to the obligee for the benefit of the child that will satisfy the support obligation under the child support order in the event of the obligor’s death.

Therefore, a Court can order a parent to obtain and maintain a life insurance policy to ensure that their child is left with sufficient means of financial support until they turn 18 and graduate high school.

A Texas Court will consider the following factors when establishing a duty to maintain life insurance to fulfill a child support obligation:

  • The present value of the monthly child support payments required until the child turns 18 and graduates from high school;
  • The present value of the periodic cost of insurance premiums necessary to benefit the child until they reach the age of 18;
  • Whether a child has special needs or education that may continue into adulthood.
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