Life insurance after divorce
Three things need attention, and one of them is a court order you can't override.
Divorce touches life insurance in three ways: who's named, who owns the policy, and what a court order requires. They're separate questions and all three need answering.
Get advice from your attorney on the decree itself. What follows is the insurance mechanics.
Beneficiary designations
Divorce does not automatically remove an ex-spouse as beneficiary on most policies. Some states have statutes that revoke designations on divorce, and they don't cover every situation or every plan type.
Don't rely on that. Contact each insurer and change the designation explicitly — and check employer coverage, which has its own separate designation people routinely miss.
Unless a decree requires you to keep them named, in which case see below.
When a decree requires coverage
Decrees frequently require one party to maintain life insurance securing child support or alimony, sometimes naming a required beneficiary and amount.
That obligation overrides your preference. Two practical points: satisfy it with a dedicated policy rather than trying to make one policy serve two purposes, and consider who owns that policy — the person who benefits from it has an interest in knowing it's still in force.
Ownership matters more than people think
If your ex-spouse is required to maintain coverage for your children and you have no way of knowing whether they're paying, the protection is theoretical.
Arrangements where the beneficiary owns the policy, or receives lapse notices, solve that. It's worth raising with your attorney while the agreement is being drafted rather than afterwards.
Permanent policies are property
A policy with cash value may be a marital asset subject to division. Don't surrender one in the middle of proceedings — that can have tax consequences and may affect the settlement.
Request an in-force illustration and the current cash surrender value so the asset is properly valued rather than guessed at.
The checklist
- Change beneficiaries on every policy, except where a decree requires otherwise
- Check employer coverage separately
- Check retirement accounts and payable-on-death designations too
- Establish who owns any policy required by the decree, and who gets lapse notices
- Value permanent policies properly rather than surrendering them
- Re-size your own coverage for your new circumstances
- Review auto and home policies, which also need separating
Common questions
Not automatically on most policies. Some states have statutes revoking designations on divorce, but they don't cover every situation or plan type. Change it explicitly with each insurer.
That obligation overrides your preference. Satisfy it with a dedicated policy rather than making one policy serve two purposes, and settle who owns it and who receives lapse notices.
It may be, and subject to division. Don't surrender one during proceedings — request an in-force illustration and current surrender value so it's valued properly.
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This page is general information, not advice about your specific circumstances. A licensed insurance professional can tell you what’s actually available to you.
General information only, not insurance advice. Coverage, availability, and terms vary by insurer and by state, and are subject to underwriting. Quote My Policy LLC is a licensed insurance producer. Nothing here binds coverage.