How does the claims process work?

The insurance program would be governed by the contract. One possible contract would provide payment of child support whenever child support stopped for any reason for any length of time. This is obviously an impossible contract to write. Why? The obligor would simply stop paying child support and would expect the insurance company to pay forever. No amount of money would be enough to pay the premium on such a policy.

Other conditions could be placed on payment of claims. One condition could be the involuntary unemployment of the obligor. He’s lost his job and qualifies for unemployment. In that case the insurance policy would pay his child support through the state disbursement unit which in turn would pay the money to the obligee. The insurance claim is paid through the state disbursement unit in order to give the obligor credit for any payments made.

Claims would be made by either the obligee or the obligor (or the child in some situations). The insurance company would approve or deny the claims and begin paying immediately. The policy language would assure both parents that even though there might be a time lag between the child support ending (due to unemployment) and the claim being paid, the total amount of unpaid child support would be paid. In other words, the obligor would never become delinquent in his support, and the child would not miss any child support.