Is life insurance required to secure a child and/or spousal support obligation?

A court may well require the payor of support to secure the payment by obtaining a life insurance policy to secure their support obligation. This way, in case the support-payor dies amidst his/her obligations, the children and/or spouse will be awarded the life insurance proceeds arising from the payor’s death in lieu of future support payments.

For instance, the Ontario Court of Appeal in Katz v. Katz ordered the father to purchase a life insurance policy for $500,000 and designate his children as beneficiaries and their mother as trustee of this policy. Furthermore, the judge also required the father to obtain the policy within 60 days of the release of reasons for judgment.

Just as the Court of Appeal held in Katz, the parties were made well aware that once the father’s child support obligations ceased to exist, the requirement to maintain the policy would cease.

Interestingly, in Katz, the father had a medical condition that prevented him from purchasing life insurance. Upon hearing the news, the mother of the children brought a motion for contempt based on the fact that the father was not complying with the court’s original order to obtain life insurance. The motions court ultimately ruled that there was nothing more the husband could do, and thereby it refused to make any further order with respect to the father purchasing life insurance.

To learn more about life insurance and child support as well as the services provided by Krol & Krol, call 905.707.3370 today.