Rarely it is the case that parents are financially better off after divorce and thus family protection needs after divorce are often more important than whilst married ~ should the payer of maintenance become too ill to work, how will they cope financially being faced with possibly providing for two families ~ something may just have to give !
Family lawyers tend not to highlight the importance of protection post-divorce and even where it is considered by divorcing parents, it is often decided against, being seen as an additional and unnecessary expense at a time when finances generally are stretched.
The reality, however, is that protection need not be expensive.
One of the cheapest forms of life assurance is the Family Income Benefit plan. These are ideal where a predefined term is required e.g. a child’s 18th birthday with a set amount of monthly income ~ the amount of maintenance ~ being the sum that needs to be insured.
Family Income Benefit plans will provide a basic income, yet there are many other forms of protection that can be bundled together to provide financial protection after divorce.
Protection against illness and accidents is perhaps more important as either event could cause financial hardship and statistically, the risk of being off work due to illness or accident is much greater than death before retirement age.
It is also worth considering whether any non-earning parents are insured against death or illness. If the parent who stays at home to look after the children could no longer do so due to death or illness, this could have significant financial implications for the working former spouse.
Even where the divorce has been finalised and maintenance payments have been agreed and in place, it is possible to take out life cover on your ex-spouse retrospectively to protect such payments, the key being that there has to be insurable interest and a financial interest.
All in all the options and choices are wide and varied ~ the starting point is to raise family protection post-divorce as a conversation piece and to work with an appropriately qualified financial planner on a case by case basis.
