Overall you seem to be doing well. I have one observstion and that is about you holding back on discussing the insurance. It's nice gesture. Actually it is s Nice Guy trait.
In general I am a believer in doing the "nice" thing as a good way yo live. Hard core people hear will say (and correctly) that she should reap what she sows. Some guys have had their W come back because they didn't protect them financially. They stopped paying regardless of her situation. It wasn't their problem.
I haven't followed your story in depthly so I cannot offer a clear opinion on what is best. I hear you about not wanting the kids to suffer or miss out due to W not having money. That is commendable. I probably would stop the insurance and if possible divert that money to benefit the kids.
Best wishes
R 25 years M 14 years S11 & S13 Working on it alone since Oct 2014 M in trouble a lot earlier (~2 years) Feb 2016. 1st R chat in a yr. Next R chat Aug'17 Still together