If being awarded maintenance or some form of ongoing income as part of a divorce settlement, you need to consider what would happen to that income (and your cashflow!) if the person paying the maintenance should die or become unable to work and maintain the payments due to illness or accident.
The protection for these payments could be secured by using life assurance which would pay out for a known period of time, providing an income or a lump sum should the ex-spouse die or become critically ill.
Such a policy could be taken out by the ex-spouse on their own life as part of the settlement although it would be sensible for the person receiving the maintenance to actually take over making the premium payments to ensure that the policy does not lapse without their knowledge should the payer stop making contributions to it!
If there is no such policy in place and the ex-spouse should die then, there could be a claim on their estate for the continuation of any unmade payments. This is hardly an ideal situation for either party and likely to be a fairly long process to arrange if it came down to it.
The good news is that life assurance is fairly cheap in the scheme of things provided the person to be insured is in reasonable health.
A Financial Planner will be able to calculate an appropriate level of cover with relevant additional benefits if necessary. There is no excuse then for not dealing with this important detail.
