A Pennsylvania resident who receives alimony or child support because of a court order may depend on those funds to make ends meet. However, the death or disability of the paying party could undermine one's budget quickly. Fortunately, insurance products are available to guard against these possibilities, and in many cases, judges will require some such precautions as part of a divorce order. Life insurance is much more commonly ordered, but an awareness of disability options could head off later financial problems for both parties to a settlement.
If a person who owes support becomes disabled because of an injury or illness, they may be limited to receiving Social Security disability benefits, which may reduce their monthly income dramatically. This could lead to an inability to keep up with support payments, causing the recipient of those funds to struggle as well. If the paying party seeks a modification because of their condition and changed financial situation, the amount received by the ex-spouse could drop to a much lower amount. With a disability insurance policy to satisfy child support or alimony obligations, these worries would be addressed without such dramatic changes in the recipient's finances.
High-net-worth divorce settlements might not be quite as fragile due to a better financial standing on the part of the support-owing party, but high-value disability policies may be available to offset unexpected changes in circumstance. Policies in excess of $1 million may require underwriting while policies of lesser values typically do not require this process.
An individual facing divorce may want to ask their lawyer about life insurance and disability policies as a way of protecting themselves against difficulties the other party might face. If the other party is elderly or works in a risky profession, for example, these safeguards may be especially sensible. A lawyer may help in explaining additional spousal interests, including eligibility for Social Security benefits, retirement accounts and investments that might be subject to property division laws.