Federal law often governs how courts may allocate military pay and other benefits. One example is the limit placed on the Service Members Group Life Insurance policy or "SGLI."
Clients often ask about whether the Court will require a party to procure life insurance to secure their alimony or child support obligation. Like many legal questions, the answer is "it depends."
Courts do have the authority to order a party to provide term life insurance to secure his or her child support and alimony payments. See Fla. Stat. §§ 61.08(3), 61.13(1)(c); Sobelman v. Sobelman, 541 So. 2d 1153, 1154 (Fla. 1989).
When determining whether life insurance is appropriate, the court will consider the need for the insurance, the cost and availability of the insurance, and the financial impact upon the obligor. See Child v. Child, 34 So. 3d 159 (Fla. 3d DCA 2010); Plichta v. Plichta, 899 So. 2d 1283, 1287 (Fla. 2d DCA 2005). See also Byers v. Byers, 910 So. 2d 336, 346 (Fla. 4th DCA 2005).
Florida courts have held, however, that certain "special circumstances" must be present to require a payor to purchase life insurance on his or her alimony or child support obligation. See Child v. Child, 34 So. 3d 159 (Fla. 3d DCA 2010); Massam v. Massam, 993 So. 2d 1022 (Fla. 2d DCA 2008); Melo v. Melo, 864 So.2d 1268 (Fla. 3d DCA 2004); Frechter v. Frechter, 548 So.2d 712 (Fla. 3d DCA 1989).
But, the "special circumstances" are not particularly difficult to prove. The special circumstances may be present where the former spouse would face difficult financial circumstances if the support payments were to cease upon the death of the obligor. The circumstances may be present where the surviving party has limited earning capacity or children to support. See, e.g., Child v. Child, 34 So. 3d 159 (Fla. 3d DCA 2010); Kotlarz v. Kotlarz, 21 So. 3d 892, 893 (Fla. 1st DCA 2009); Richardson v. Richardson, 900 So.2d 656, 661 (Fla. 2d DCA 2005); Massam v. Massam, 993 So. 2d 1022 (Fla. 2d DCA 2008);Davidson v. Davidson, 882 So. 2d 418 (Fla. 4th DCA 2004).
If the special circumstances are present, the Party requesting the life insurance must establish that the amount of insurance sought is available at an affordable cost. See Massam, 993 So. 2d at 1022; Rubinstein v. Rubinstein, 866 So. 2d 80 (Fla. 3d DCA 2003); Zimmerman v. Zimmerman, 755 So. 2d 730 (Fla. 1st DCA 2000); and Schere v. Schere, 645 So. 2d 21 (Fla. 3d DCA 1994).
It would seem that any military spouse could easily establish that SGLI is readily available for all service members at an affordable cost. The United States Supreme Court, has held, however, that a state court may not order a service member to include his former spouse as a beneficiary of the SGLI policy. See Ridgway v. Ridgway, 454 US 46 (1981). This is true even if the Service Member signed a marital settlement agreement and agreed to include the former spouse as a beneficiary. Accordingly, parties and practitioners alike should beware any order or agreement that makes specific reference to the SGLI. The better approach is to request a general term life insurance policy in a designated amount, and the service member may choose to satisfy this requirement by making the SGLI beneficiary designation or purchasing term life insurance through a private insurer.