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Life insurance requirements for parents paying child support

For many of those parents in San Antonio who receive child support payments, that money may represent a significant portion of their household income. In fact, according to information shared by the U.S. Census Bureau, child support payments accounted for over 70 percent of the mean annual income for parents living below the poverty line in 2013. Given the reliance that so many have on this money, one may wonder what happens if the parent paying child support dies while still under this obligation.

The Texas Family Code has included a provision to account for this possibility. It states that the court may order a parent obligated to pay child support to carry a life insurance policy that will establish either an annuity or an insurance-funded trust to cover the extent of his or her obligation. The account established by such a policy in the event of the obligated parent’s death will be made payable to the parent receiving the payments. In determining the amount of coverage such a policy must make available upon the parent’s death, the court considers the following factors:

  •          The present value of all monthly payments owed from the date child support payments were ordered to the month the child covered by the obligation turns 18.
  •          The present value of all health and dental insurance premiums required for the child from the date child support was initially ordered until the month he or she turns 18.
  •          Any special considerations that the law takes into account when determining if a disabled child will continue to require support after exceeding 18 years of age.

When mandated by the court to carry this insurance, the obligated parent may be required to produce proof of such coverage upon request. 

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