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Life insurance can be part of support order

lifeinsurance_mainDivorce lawyers have a new tool in their chest when it comes to crafting a support plan for a dependent spouse.

A new Virginia law effective July 1 gives judges the authority to order a support-paying spouse to maintain life insurance for the benefit of the spouse receiving support.

The new statute – Virginia Code § 20-107.1:1 – overrules a 1984 Supreme Court of Virginia decision and sets out a framework for lawyers and judges to follow.

The legislation fills a gap. The Virginia Code already allows a judge to order continuation of a life insurance policy to benefit children, but not spouses, who benefit from support payments.  Judges have been permitted to order one spouse to maintain life insurance for another spouse, but only in a pendente lite situation, not post-divorce. Another statute allows courts to order annuity survivor benefits for a dependent spouse, but not life insurance.

The 2017 legislation – House Bill 2289 was the measure that emerged – is far more detailed than open-ended life insurance proposals that failed to clear the Assembly in the past.

Under the new law, a judge can order maintenance of an existing policy, but cannot compel purchase of a new policy. The policyholder can ask the court to revisit the order based on changed circumstances, including a change in health or inability to pay the premium.

Many cooks

The bill came under repeated scrutiny before becoming law. It first was studied by a committee of the Boyd-Graves Conference.

“The primary policy reason in urging support of the bill is the need to protect the recipient spouse from the economic hardship that would occur in the event of the death of the payor spouse,” wrote committee chair Sandra L. Havrilak in 2015.

Balanced against that need was the economic hardship on the payor spouse in having to maintain life insurance, the committee added.

“We had lively debates on the topic,” Havrilak wrote. The need to preserve an income stream carried the day.

“We really needed to get some protection for people who were getting an award,” said Lawrence D. Diehl of Richmond, who authored the Boyd-Graves draft legislation.

The committee recommended limits on a judge’s power to compel a spouse to keep life insurance in place. The panel emphasized that a court should not have authority to order someone to purchase a new life insurance policy.

Before introduction at the General Assembly, the proposal was considered by the Virginia Family Law Coalition. Chair Cheshire I. Eveleigh of Virginia Beach said the measure broke new ground.

“This is the first time we’ve had something that authorizes a court to order maintenance of a life insurance policy in a final divorce decree,” she said.

The new law overrules the holding of the Supreme Court in Lapidus v. Lapidus. The court in 1984 had reversed a trial judge who ordered life insurance kept in place for the benefit of a recipient spouse.

The family law group added its blessing and the proposal was introduced in both the House and Senate in January.

Nine lives

Diehl helped shepherd the legislation through what he termed its “nine lives” in the Assembly.

The Senate version failed on a narrow vote after one senator raised technical concerns.

On the House side, proponents tried to meet those concerns. Even after the House version, with several revisions, finally made it through the Assembly, Diehl learned that Gov. Terry McAuliffe had a problem with it.

“What if the payor spouse remarries?” was the question from the governor’s office.

Supporters reconvened to craft language to provide that remarriage could be considered a “material change in circumstances” warranting modification of a court order, Diehl said.

“We had to go through all these gymnastics to meet the governor’s concerns,” he said.

The late adjustments meant the bill was still in play through the Assembly’s veto session in April.

“I’ve done a lot of legislative stuff, and this was the most intensive one,” Diehl said.


The bill makes clear that a life insurance order only applies as long as the payor has an obligation to pay spousal support or separate maintenance.

The court “shall consider”:

  • The age, health and insurability of the insured party,
  • The age and health of the payee spouse,
  • The cost of the insurance,
  • The amount of term of the support award,
  • Prevailing insurance rates,
  • The ability of either spouse to pay the premiums, and
  • Such other factors as the court deems necessary or appropriate to arrive at a “fair order.”

A judge can modify the life insurance requirement based on changes in circumstance, including the payor’s remarriage, and in consideration of the listed factors. If the payor’s employer terminates a life insurance benefit, the payor is protected from a finding of contempt.

Diehl said it is the consensus of the drafters that the new law applies prospectively only, so it affects only divorce cases filed after July 1.

“This is a substantive change,” Diehl said. “I think it’s pretty clearly a prospective bill only.”

And the designers may make changes after a test drive, he added.

“We’ll probably have to tweak this. It’s probably going to be a work in progress for a few years,” Diehl said.

He said the bill does not address a spiteful spouse who cancels a life insurance policy in anticipation of a divorce action.

“We’ll just have to live with the potential of that happening,” Diehl said.

Diehl said the new statute gives divorce lawyers a better negotiation tool.

“I expect it to encourage settlements and reduce litigation,” he said.